Green Economy in a Blue World-Full Report

reuse. Of the three involved sectors, agriculture at about US$2 850 billion in gross production value (2009) (FAO STAT, 2012a) is by far the largest in terms of annual sales and contribution to global GDP. All three sectors are projected to grow substantially in the next 50 years; agriculture needs to continue to expand to feed a still growing human population and rapidly changing consumption patterns particularly in the middle-income countries. The fertilizer industry must in turn grow to meet increasing demands of agriculture and complete the green revolution by enhancing agricultural productivity in least developed countries, particularly in Africa. With only around 10-20 per cent of the developing world’s waste water even receiving primary treatment, clearly substantial additional investment will be required in the sector over the next 50 years, particularly in rapidly growing coastal urban centres in these developing countries. The developed world still represents the majority of the world’s hypoxia hot spots so clearly substantial additional investment, technological innovation and strengthening of nutrient management practices remains essential in the North if eutrophication and hypoxia are to be reversed. The economic case for greening the nutrient economy rests on arguments pertaining to likely

costs, benefits, cost effectiveness and potential impacts (positive or negative) on employment in each of these sectors; this issue is explored in the next section. 2.3.1 Cost-benefit analysis of greening the sectors Most of the work done to date on costs, benefits and cost effectiveness of different strategies to reduce reactive nitrogen contamination of rivers and coastal areas has been done in Europe and the US; the European Nitrogen Assessment (Sutton, et al., 2011) is probably the most recent, comprehensive review including on issues of costs and benefits. Estimates by the latter of the economic damage from excess reactive nitrogen (to atmosphere and water) in the EU alone amount to the equivalent of €70-320 billion per year with an estimated €15-70 billion for the aquatic environment or €5-20 per kg N. The corresponding benefit of nitrogen fertilizer to farmers is estimated at €10-100 billion per year and €1-3 per kg N so this provides some initial evidence that overall benefits of improved nutrient management in the EU would exceed costs (since the avoided per-kg-N cost of nitrogen fertilizer exceeds the per-kg benefit to farmers). These figures and the similarity of sources and impacts in other parts

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