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The chemical nitrogen cycle is becoming better characterized in terms of fluxes and reservoirs on a variety of scales. Galloway has demonstrated that reactive nitrogen can cascade through multiple ecosystems causing environmental damage at each stage before being denitrified to N2. We propose to construct a parallel economic nitrogen cascade (ENC) in which economic impacts of nitrogen fluxes can be estimated by the costs associated with each stage of the chemical cascade. Using economic data for the benefits of damage avoided and costs of mitigation in the Chesapeake Bay basin, we have constructed an economic nitrogen cascade for the region. Since a single tonne of nitrogen can cascade through the system, the costs also cascade. Therefore evaluating the benefits of mitigating a tonne of reactive nitrogen released needs to consider the damage avoided in all of the ecosystems through which that tonne would cascade. The analysis reveals that it is most cost effective to remove a tonne of nitrogen coming from combustion since it has the greatest impact on human health and creates cascading damage through the atmospheric, terrestrial, aquatic and coastal ecosystems. We will discuss the implications of this analysis for determining the most cost effective policy option for achieving environmental quality goals.

Nitrogen oxides are released during atmospheric combustion of fossil fuels and biomass, and during the production of certain chemicals and products. They can react with natural or man-made volatile organic compounds to produce smog, or else can be further oxidized to produce particulate haze, or acid rain that can eutrophy land and water. The reactive nitrogen that begins in the energy sector thus cascades through the atmosphere, the hydrosphere and soils before being eventually partially denitrifed to the global warming and stratospheric ozone-depleting gas nitrous oxide or molecular nitrogen. This paper will suggest how an economic analysis of the nitrogen cycle can identify the most cost-effective places to intervene. Nitrogen oxides released during fossil-fuel combustion in vehicles, power plants and heating boilers can either be controlled by add-on emission control technology, or can be eliminated by many of the same technical options that lead to carbon dioxide reduction. These integrated strategies also address sustainability, economic development and national security issues. Similarly in industrial production, it is more effective to focus on redesigning industrial processes rather than on nitrogen oxide pollution elimination from the current system. This paper will suggest which strategies might be utilized to address multiple benefits rather than focusing on single pollutants.