A Comparative Study, Volume 2
- The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development
Edited by Anil Markandya and Marialuisa Tamborra
Chapter 10: Developments in Estimation of Damages to Crops
Onno Kuik, Kees Dorland, Frank A. Spaninks and John F.M. Helming 10.1 INTRODUCTION Air pollution generally has a negative impact on crop yields. In Chapter 8 of this report the monetary value of the impact of ozone on crops in the Netherlands in 1994 was estimated at Euro 150 million. Chapter 8 used the methodology described in Markandya and Pavan (1999) and previously presented in Chapter 1. This methodology uses experimentally derived exposure–response functions that relate ambient concentrations of air pollutants to reductions in yield per unit area to calculate yield reductions. Yield reductions are then multiplied by ﬁxed crop prices to arrive at the monetary damage estimate. We call this the simple multiplication method. For very small changes in air quality and consequently relatively small changes in yields, this procedure can be defended on the grounds that the changes will not result in any signiﬁcant changes in prices or other variables that are relevant to the valuation. In the previous phase of the research presented in Markandya and Pavan (1999), however, damages are calculated for current levels of air quality relative to non-anthropocentric background levels. Such changes in air quality cannot be considered marginal. Nonmarginal changes in yields will have eﬀects on market prices that may feed back into farmers’ supply decisions, choice of crops and cultivators, input use and so on. The simple multiplication approach ignores these economic adjustments. This section examines whether the use of an economic model to simulate market and farmers’ responses...
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