Cascading costs: an economic nitrogen cycle

The chemical nitrogen cycle is becoming better characterized in terms of fluxes and reservoirs on a variety of scales. Galloway has demonstrated that reactive nitrogen can cascade through multiple ecosystems causing environmental damage at each stage before being denitrified to N(2). We propose to construct a parallel economic nitrogen cascade (ENC) in which economic impacts of nitrogen fluxes can be estimated by the costs associated with each stage of the chemical cascade. Using economic data for the benefits of damage avoided and costs of mitigation in the Chesapeake Bay basin, we have constructed an economic nitrogen cascade for the region. Since a single ton of nitrogen can cascade through the system, the costs also cascade. Therefore evaluating the benefits of mitigating a ton of reactive nitrogen released needs to consider the damage avoided in all of the ecosystems through which that ton would cascade. The analysis reveals that it is most cost effective to remove a ton of nitrogen coming from combustion since it has the greatest impact on human health and creates cascading damage through the atmospheric, terrestrial, aquatic and coastal ecosystems. We will discuss the implications of this analysis for determining the most cost effective policy option for achieving environmental quality goals.