More than half of the world’s population is nourished by food produced with nitrogen from the Haber–Bosch process. Yet, the nitrogen is not used efficiently. The global social costs on ecosystems and the impact on human health originating from excessive nitrogen are estimated to be a magnitude higher than the fertilizer costs.
A prominent example of mitigating the effect of nitrogen on the environment is that since 2000 the Chinese government has invested over US$30 billion to reduce agricultural nitrogen loading to waterways. In China, croplands contribute to more than one-third of N discharge into the water. A recent study estimated that around US$100 billion worth of infrastructure will be required to restore safe and sustainable nitrogen levels in waterbodies in China.
We all know “prevention is cheaper than cure,” but we don’t have effective policies to provide financial incentives for more efficient nitrogen management practices, products, or services. For example, enhanced efficient nitrogen fertilizers and precision nitrogen management (including 4Rs) demonstrated 20–30% higher nitrogen use efficiency while reducing nitrogen losses to the environment.
However, whether or not to adopt these measures depends on the costs and benefits for farmers. In particular, for small-scale farmers, the costs may be significant and the benefits too small.
That’s why a study by Gu et al. suggested a nitrogen credit system to reduce agricultural pollution and improve nutrient use efficiency. The idea is to share the burden and responsibilities among farmers, suppliers, processors, retailers, consumers, and governments.
The aim of a public-regulated and funded nitrogen credit system is to provide economic incentives to farmers by subsidizing them to adopt certified environmentally friendly practices to mitigate nitrogen pollution. It is based on 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, which would be in proportion to the societal benefit of reduced nitrogen pollution and higher than the abatement costs
- 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 scientists.
This concept has been recently published in “Cost-effective mitigation of nitrogen pollution from global croplands” in Nature. We identified 11 key measures that could reduce nitrogen losses. Implementing these would lead to a global societal benefit of US$476 ± 123 billion on top of US$15 ± 4 billion in fertilizer savings. At the same time, mitigation costs would only be US$19 ± 5 billion.
For China alone, the net benefit might reach up to ~US$80 billion. However, as no one is willing to invest a substantial amount upfront, the implementation is still outstanding. This lack of real financial incentives prevents the wide adoption of efficient management practices and products, including recycling and reusing organic waste N. To circumvent this issue and combat agricultural nitrogen pollution, the nitrogen credit system represents an interesting and effective concept.
