Nutrient Pollution and US Agriculture: Causal Effects, Integrated Assessment, and Implications of Climate Change

We study the relationship between water nutrient pollution and US agriculture using data between the early 1970s and late 2010s. We estimate a positive causal effect of corn acreage on nitrogen concentration in the country's surface water quality. We find that a 10 percent increase in corn acreage causes an increase in nitrogen concentration in water by at least 1 percent and show that the magnitude of the acreage effect increases with precipitation but not with extreme-heat degree days. Based on the average streamflow of the Mississippi River at the Gulf of Mexico during this period and damages of about $16 per kilogram of nitrogen, this 1 percent increase in average nitrogen concentration implies an annual external cost of $800 million. Using recent climate models to project the implications of climate change for the magnitude of the estimated effects, we conclude that climate change will not materially change the estimated relationship between corn acreage and nitrogen concentration.