The economic benefits to agriculture of a reduction of low-level ozone pollution in The Netherlands

Low-level ozone pollution affects crop yields adversely. Reduction of ozone pollution would therefore increase crop yields and provide economic benefits to producers and consumers of farm products. This paper assesses the potential magnitude of these benefits for the Netherlands. Exposure-response functions were used to estimate initial yield responses when ozone pollution is reduced to natural background levels. These yield responses were fed into a spatial economic model of the Dutch farm sector, thereby allowing for demand and supply adjustments in all interrelated markets. A novelty in this analysis is the explicit attention to crop-livestock interactions. The annual economic benefits of ozone reduction for producers and consumers of farm products are estimated to be 310 million Euro, of which 91 million Euro goes to producers and 219 million Euro to consumers.