We propose a framework to design economic incentives to farmers to mitigate nitrogen pollution in contrasting regions of the world. Solutions fit in the broader context of the food chain and acknowledge both their responsibilities and limitations of consumers, suppliers, processors, retailers and governments.
The proposed Nitrogen Credit System provides economic incentives such as subsidies based on the implementation cost and societal benefit to farmers to adopt environmentally friendly practices to mitigate nitrogen pollution (Best Management Practices).
The credit system consists of three components:
- certified measures to abate nitrogen pollution, e.g., appropriate caps or limits for nitrogen (when farmers adopt these measures, they earn credits);
- a budget to subsidize these credits. The subsidy ideally is in proportion to the societal benefit of reduced nitrogen pollution and higher than the abatement cost;
- a board to administer the credit system that is responsible for granting credits and enforcing compliance. The board members ideally represent farmers, inhabitants and consumers, industry, government and science.
Hans van Grinsven