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Nitrate pollution from agriculture is an important environmental problem, caused bythe excessive use of inorganic fertilizers. The internalization of this externality, via a tax onmineral nitrogen, could lead to a second best solution, reducing nitrate emissions. Severalauthors suggest that a reduction in agricultural support could produce similar results. Inthis paper we examine the effects of a nitrogen levy on nitrate pollution from agriculture innorthern France under two different policy scenarios corresponding to (i) the Agenda 2000and (ii) the Luxembourg reform of 2003, including the 2006 arrangement. The analysisaims at revealing what synergies or conflicts are created between a fertilizer levy and thepolicy scenarios, with respect to nitrate pollution mitigation. The applied methodology isbased on the coupling of the economic model AROPAj with the crop model STICS. For eachpolicy scenario, a nitrogen tax is simulated, involving different tax levels up to 100% theinput price. Results reveal that at higher tax levels the reformed CAP can lead to slightlygreater nitrate reductions than Agenda 2000, while the opposite applies when the tax is low.A down-scaling method is then used for the spatial distribution of the outputs, allowingfor a more detailed representation of the nitrate abatement effects of the N-tax at differentgeographical levels.
