Skip to main content
Research article - Peer-reviewed, 2014

Climate change and regulation of nitrogen loads under moral hazard

Elofsson, Katarina


Within the European Union, it is agreed that watershed-based management of water quality problems is more efficient than centralised arrangements. In this study, a mechanism for allocating international funds to watershed authorities for nitrogen abatement in the presence of moral hazard is investigated. The results show that when there is a risk of climate change, the cost of moral hazard to the international funding agency can be high if there is a moderate likelihood of climate change and the watershed authority is guaranteed a high minimum compensation.


nitrogen; climate change; moral hazard; Baltic Sea; policy instruments

Published in

European Review of Agricultural Economics
2014, Volume: 41, number: 2, pages: 327-351

    SLU Authors

    Sustainable Development Goals

    SDG6 Clean water and sanitation
    SDG13 Climate action

    UKÄ Subject classification


    Publication Identifiers


    Permanent link to this page (URI)