Climate mitigation co-benefits from sustainable nutrient management in agriculture : Incentives and opportunities

Nitrogen management policies introduced in the past decades by some OECD countries have succeeded in reducing excess nitrogen use by farmers, but half of global mineral fertiliser use is still lost for crops. While about half of OECD countries have nutrient surpluses of between 25-50 kg N per hectare, a smaller number of countries are still having surpluses of more than 100 kg N per hectare. Since the production and use of mineral fertilisers have a large greenhouse gas footprint and to achieve the deep reductions in emissions as the Paris Agreement aims for, nitrogen management policies could be reinforced and pursued more systematically. The paper identifies significant reduction potential by eliminating the excess use of nitrogen fertilisers and improving efficiency in the use of manure-nitrogen, which could be obtained with a redesign of nitrogen management policies and schemes for public financial support. To underpin such measures a tax on the nitrogen surplus at farm level could play a vital role. Based on the available estimates of environmental externalities of nitrogen, the paper identifies an average rate of EUR 1-2 as a suitable starting point for a tax or penalty on the surplus application of nitrogen. The paper also explores the opportunities for sustainable nutrient management in agriculture with climate mitigation benefits relating to nitrous oxides in particular.