Working Paper: NBER ID: w30124
Authors: Konstantinos Metaxoglou; Aaron Smith
Abstract: We study the relationship between water nutrient pollution and U.S. agriculture using data between the early 1970s and late 2010s. We estimate a positive causal effect of corn acreage on nitrogen concentration in the country’s water bodies using alternative empirical approaches. We find that a 10% increase in corn acreage causes an increase in nitrogen concentration in water by at least 1% and show that the magnitude of the acreage effect increases with precipitation but not with extreme temperature. Based on the average streamflow of the Mississippi River at the Gulf of Mexico during this period and damages of about $16 per kilogram of nitrogen, this 1% increase in average nitrogen concentration implies an annual external cost of $800 million. We also report the results of additional integrated-assessment type of exercises aimed to inform policy makers, and we use recent climate models to project the implications of climate change on the magnitude of the estimated effects. We estimate that climate change will not materially change the relationship between corn acreage and nitrogen concentration in waterways
Keywords: nutrient pollution; agriculture; corn acreage; nitrogen concentration; climate change
JEL Codes: Q15; Q48; Q51; Q53; Q58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Corn Acreage (Q15) | Nitrogen Concentration (Q30) |
| Precipitation (Q54) | Nitrogen Concentration (Q30) |
| Corn Acreage and Precipitation (Q15) | Nitrogen Concentration (Q30) |
| Corn Acreage (Q15) | Nitrogen Concentration Elasticity (Q31) |
| Corn Acreage (1 SD increase) (Q15) | Nitrogen Concentration (Q30) |
| Nitrogen Concentration Increase (Q53) | External Costs (D62) |