Economic criteria for using wetlands as nitrogen sinks under uncertainty

If the environmental damages that are caused by excessive nitrogen load to the sea depend on the timing of emissions, then monitoring the stochastic v ariation of emissions is crucial for controlling eutrophication damages. A significant problem of nonpoint source (NPS) nitrogen pollution is that emi ssions are stochastic and difficult to control. The main purpose of this pa per is to examine under what criteria wetlands are economically rational to use for controlling stochastic NPS pollution. Three criteria are identifie d using a simplified stochastic watershed model. It is suggested that wetla nds are economically rational to use, especially when monitoring the uncert ainty of emissions is a part of the decision problem. The theoretical findi ngs are illustrated with an example from southwestern Sweden. (C) 2000 Else vier Science B.V. All rights reserved.