Dynamic efficiency of soil erosion and phosphor reduction policies combining economic and biophysical models

In this paper, we propose the use of the metamodeling approach to determine the optimal intertemporal management of soil and phosphorus losses from agricultural land. This approach enables to find a common equilibrium of the economic and biophysical systems. In contrast to the existing literature, the model takes into account nonlinear biophysical relationships and land-use choices. As a solution to the mathematical problems arising from this complex setup, we propose and employ a modified Cobb Douglas function in the empirical part of the paper. Most importantly, we allow for the comparison of different soil erosion and phosphorus reduction policies. The results show that an indirect policy in the form of soil protection scores (SPS) is highly inefficient, while another indirect policy in the form of land-use taxes is nearly as efficient as a direct policy.