Water quality of groundwater, rivers, and seas is still negatively influenced by high diffuse nitrogen and phosphorus discharge. Increasing importance is attached to cost-effectiveness to indicate sufficient measures to reduce nutrient input of land use. The aim of this paper is to find cost-effective solutions for diffuse nutrient load reductions for the German Baltic Sea region (by formulating scenarios for a 25% and 50% reduction of nitrogen and phosphorus). I combined nutrient emission and land use modelling (literature analyses, MONERIS-data) with economic land use analysis (e.g. opportunity costs, costs of the production methods) in a cost-effectiveness analysis.

The results show that total reduction costs need not be as expensive as often anticipated (e.g. 25% simultaneous reduction of nitrogen and phosphorus costs about 8–20 € (ha y)⁻¹).

Advisory service turned out as the most cost-effective measure and the most important indicator for the cost-saving potential. The measure included guidelines to the farmers on land use and water quality optimization. For example, if a 100% advisory service is successful, total costs for a 25% simultaneous reduction of nitrogen and phosphorus could drop by 65%, corresponding to 23 million € y⁻¹ compared to a 50% advisory service. Due to a lack of data, I could not consider the additional nutrient retention capacity of wetlands and buffer strips in the analysis.

The policy recommendations derived from this study deliver insights for the strategic orientation of water protection policy and useful indicators to measure the performance. The results are of interest not only in the Baltic Sea context, but also for supporting and facilitating the application of the cost-effectiveness analysis postulated in the Water Framework Directive. Future research should concentrate on improving data availability (e.g. livestock husbandry) and models and on implementing further transaction costs and additional indicators like nutrient retention of wetlands.