Policy Incentives for Reducing Nitrate Leaching under Intensive Larix olgensis Seedlings Growing in Jilin, China

Abstract-Excess irrigation and nitrogen applications result in substantial nitrate leaching into groundwater in intensively seedlings growing in Jilin. An integrated modeling approach was developed and applied to compare policy incentives to reduce nitrate leaching. The integrated model consists of a process-based biophysical model, a meta-model, a seedling nursery economic model and an assessment of policy incentives. The modeling results show that there are "win-win" opportunities for improving nursery profitability and reducing nitrate leaching. We found that 54,540 Yuan ha^-1 of nursery gross margin could be obtained with a reduction in nitrate leaching of 77.2 kg ha^-1, so that an appropriate policy incentive about Larix olgensis seedlings growing in this area is necessary. When the economic optimum is obtained reduction in nitrate leaching are not achievable without profit penalties and there is a "trade-off" relationship between nursery profitability and groundwater quality protection. The combination of low elasticity of nitrate leaching and large elasticity of seedling nursery gross margin against water price increases results in very high costs for reducing nitrate leaching(5056.8Yuan kg^-1).It is suggested that if the water price increases were coupled with subsidies for adopting nitrate leaching mitigation practices, environmental gains could come at a lower cost.