319 – Reducing water pollution from agricultural fertilizers

I gave a talk to the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) on July 16, 2019, exploring ways to reduce water pollution from agricultural fertilizers.

Many methods have been proposed to reduce water pollution from agricultural fertilizers. The list includes use of nitrification inhibitors, land retirement, vegetation buffer strips along waterways, flood-plain restoration, constructed wetlands, bioreactors, cover crops, zero till and getting farmers to reduce their fertilizer application rates.

Last year, while I was at the University of Minnesota for several months, I reviewed the literature on these options and came to the conclusion that the option with the best prospects for success is reducing fertilizer application rates. It’s the only one of these options that is likely to be both effective and cheap.

In my talk, I made the case for agencies who are trying to reduce pollution to focus on reducing fertilizer rates.

In brief, I identified three key reasons why there are untapped opportunities to reduce fertilizer rates.

1. Some farmers apply more fertilizer than is in their own best interests. Surveys in the US suggest that something like 20 to 30% of American farmers could make more profit if they reduced their rates. If it was possible to identify these farmers and convince them of this, it would be a rare win-win for farmers and the environment.

2. Even those farmers who currently apply fertilizer close to the rates that would maximize their profits could cut their rates without sacrificing much profit. Within the region of the economically optimal rate, the relationship between fertilizer rate and profit is remarkably flat. New estimates by Yaun Chai (University of Minnesota) of this relationship for corn after corn in Iowa indicate that farmers could cut their rates by 30% below the profit-maximizing rate and only lose 5% of their profits from that crop. For corn after soybeans, the equivalent opportunity is for a 45% cut!

3. Some farmers believe that applying an extra-high rate of fertilizer provides them with a level of insurance. They think it reduces their risk of getting a low yield. However, the empirical evidence indicates exactly the opposite. When you weigh up the chances of an above-average yield and a below-average yield, higher fertilizer rates are actually more risky than lower rates. In addition, price risk interacts with yield risk to further increase the riskiness of high rates.

I think there is a real opportunity to explore these three factors in more depth and try to come up with policy approaches that could deliver reduced fertilizer usage in a highly cost-effective way. Some of it would just be about effective communication (e.g. the design of “nudges”, as popularised in behavioural economics) while some might require a modest financial commitment from government or industry. One idea is to offer something like a money-back guarantee to those farmers who agree to reduce their rates by a specified amount. If they lose money as a result, they get compensation. Because of the flatness of the fertilizer-profit relationship, the payments required would usually be very small.

I recorded the presentation to OMAFRA, and it’s available here.

Further reading

Pannell, D.J. (2006). Flat-earth economics: The far-reaching consequences of flat payoff functions in economic decision making, Review of Agricultural Economics 28(4), 553-566. Journal web page * Prepublication version here (44K). * IDEAS page

Pannell, D.J. (2017). Economic perspectives on nitrogen in farming systems: managing trade-offs between production, risk and the environment, Soil Research 55, 473-478. Journal web page

318 – Measuring impacts from environmental research

There have been some studies considering the relationship between research and environmental policy but studies capturing the impact of research on environmental management, environmental policy, and environmental outcomes are relatively rare. Here is one attempt.

Environmental research may generate benefits in a variety of ways including by providing: information or technology that allows improved management of an environmental issue; information that fosters improved decision-making about priorities for environmental management or policy; or information about an environmental issue that is of intrinsic interest to the community. There are several reasons why it can be worth measuring the impacts of environmental research, including making a case for the funding of environmental research, informing decisions about research priorities, and helping researchers to make decisions about their research that increase its ultimate benefits.

Earlier this year we released the results of an assessment of the engagement and impacts of a particular environmental research centre, the ARC Centre of Excellence for Environmental Decisions (CEED). The assessment includes impacts on policy, management and the community, as well as measures of academic performance, including publications, citations and collaborations. Data were collected in several ways: a survey of all project leaders for the Centre’s 87 projects, the preparation of detailed case studies for selected projects, and collection of statistics on publications, citations and collaborations.

The approach taken was informed by a recent paper of ours called “Policy-oriented environmental research: What is it worth?” (Pannell et al. 2018). The full report is available here.

The Centre’s engagement with end users and stakeholders was strong in Australia and around the world. Researchers reported many examples of engagement with research users involved in policy and management. Results were highly heterogeneous and somewhat skewed, with the majority of observed impact occurring in a minority of the projects.

For almost half of the projects, the potential future increase in impact was assessed as being moderate or high. To some extent, this reflects the time lags involved in research attempting to influence policy and management, but the information was also used to identify projects for which additional engagement effort could be beneficial. The correlation between impact and academic performance was positive but low.

To obtain richer detail about impacts, detailed case studies were prepared for nine research projects. The projects were selected to be diverse, rather than representative. These case studies highlight the unique circumstances faced by each project in endeavouring to have an impact. Each project must be framed within a strong understanding its domain and be deeply engaged with research users if impact is to occur. Substantial benefits for policy or management are apparent in a number of the case studies.

A factor contributing greatly to the impact of CEED was the research communication magazine Decision Point. This publication was widely accepted as a valued communication resource for academic findings in the field of environmental decision sciences, and was rated by people in government and academic institutions as relevant and informative.

Some valuable lessons and implications of the impact analysis are identified in the report. Research impact does not depend only on good relationships, engagement and communication, but also importantly on what research is done. Therefore, embedding a research culture that values impact and considers how it may be achieved before the selection of research projects is potentially important. The role of the Centre leadership team in this is critical. Embedding impact into the culture of a centre likely occurs more effectively if expertise in project evaluation is available internally, either through training or appointments.

A challenge in conducting this analysis was obtaining information related to engagement and impact. There may be merit in institutionalising the collection of impact-related data from early in the life of a new research centre.

Interestingly, we found little relationship between (a) impact from translation and engagement and (b) measures of academic merit. It should not be presumed that the most impactful projects will be those of greatest academic performance.

At the time of the assessment, CEED had generated 848 publications which had been cited 14,996 times according to the Web of Science. CEED publications are disproportionately among the most cited papers in their disciplines. More than a quarter of CEED publications are in the top 10% of the literature, based on their citations. For 39 CEED publications (one in 22), their citations place them in the top 1% of their academic fields in the past 10 years.

There are often long lags between the start of research and delivering the impact — decades in many cases. Therefore, there is a need to allow the longest possible time lag when assessing research impact. On shorter timescales, it may be possible to detect engagement, but not the full impact that will eventually result.

Further reading

Pannell, D.J., Alston, J.M., Jeffrey, S., Buckley, Y.M., Vesk, P., Rhode, J.R., McDonald-Madden, E., Nally, S., Gouche, G. and Thamo, T. (2018). Policy-oriented environmental research: What is it worth? Environmental Science and Policy 86, 64-71. Journal web page

Thamo, T., Harold, T., Polyakov, M. and Pannell, D. (2018). Assessment of Engagement and Impact for the ARC Centre of Excellence for Environmental Decisions, CEED, University of Queensland. http://ceed.edu.au/resources/impact-report.html