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Water: Nutrients Benefits Valuation

Nutrients Benefits Valuation

NOTE

This solicitation is now closed. Award information has been posted.

Award Information

Measuring Nutrient Reduction Benefits for Policy Analysis Using Linked Non-Market Valuation and Environmental Assessment Models

Grant #:
83381001-0
Funded Amount:
$423,841
Period of Performance:
03/01/2008 - 02/28/2010
Awardee:
North Carolina State University (NCSU)
Principal Investigator:
Daniel Phaneuf
Award Type:
Competitive Grant
Competition Number: EPA-OW-OST-2007-01
Research on the Economic Valuation of the Benefits from Reducing Nutrient levels in U.S. Waters. EPA Contact:
Todd Doley (202-566-1160)

Description

State agencies, charged with developing water quality standards, are frequently required to estimate the economic value of environmental benefits associated with meeting these standards. However, state environmental agencies often lack the resources and expertise needed to perform such analyses. The current project will develop and demonstrate a generalizable framework for valuing the non-market benefits of fresh water nutrient reductions. The framework is meant to specifically address states' needs for the economic valuation of the environmental benefits associated with achieving numeric nutrient water quality standards. The project has three main components:

  1. Development of a eutrophication production function mapping quantitative measures of ambient nutrient levels to qualitative indicators of water body quality and suitability for designated uses.
  2. Development of a combined revealed and stated preference model for valuation of the non-market benefits of nutrient reductions that is directly linked to the eutrophication production function. The model will provide a generalizable framework of data sources and analytical techniques designed to facilitate benefit transfer and scalability. In particular, the model will be adaptable, in that benefit functions that can be calibrated based on local conditions and local policy questions of interest.
  3. Transfer of knowledge on the general framework and it use for regulatory analysis via
    1. a training workshop for state-level water quality regulators and analysts and
    2. distribution of the software, data sources, and educational materials necessary for implementing the framework.

The project integrates three modeling approaches and exploits existing secondary data as well as primary data gathered as part of this project using eco-region IX of EPA's regional classification system in the southeastern U.S. as the demonstration area. The project builds on current research by project team members on production function modeling that aims to quantify the relationship between measurable nutrient levels and descriptive criteria for individual water bodies. The modeling effort is linked with stated preference (SP) and revealed preference (RP) valuation models, and uses an SP conjoint model to elicit preferences for the attributes of water bodies, where the attribute levels link directly to the output from the eutrophication production function. Key components of the choice experiment models will be combined with RP data on water recreation choices drawn from the most recent versions of the EPA-sponsored National Survey of Recreation and the Environment. The RP data will provide more detailed local information to enhance policy analysis in smaller geographic areas. This analytic approach utilizes a recently developed RP/SP strategy that controls for idiosyncratic, unobserved water body attributes in a location-specific benefit function that includes relevant policy variables.


Background

Frequent Questions

EPA issued a Request for Proposals (RFP) to identify and secure information that will help states estimate the economic benefits from reducing nutrient levels in the Nation's waters. Nutrients consistently rank as one of the top five causes of waterbody impairment. The first step in addressing nutrient-impaired waters is adopting appropriate numeric nutrient criteria in state water quality standards. Addressing nutrient problems is complicated by the difficulty of developing comprehensive benefit estimates for controlling nutrients.

In order to develop thorough quantification of benefits, states and tribes will needed estimate both market and non-market benefits. EPA hoped to stimulate these efforts through grants to eligible organizations and individuals. We expected that the resulting products will help states in their attempts to estimate monetary benefits associated with nutrient reductions as they strive to adopt numeric nutrient criteria into their state water quality standards.

Examples of anticipated environmental outputs from the projects funded under this announcement included, but are not limited to:

  • A summary report of all identified non-market benefits for improvements in aquatic habitat for one or more classes of water in a specific region;
  • A summary report of all identified non-market benefits for improvements in recreational opportunities for one or more classes of water in a specific region;
  • Monetized non-market benefit estimates for improvements in aquatic habitat for one or more classes of water in a specific region;
  • Monetized non-market benefit estimates for improvements in recreational opportunities one or more classes of water in a specific region;
  • Meta-analysis of existing benefits studies that are relevant to one or more classes of water in a specific region; and
  • A workshop for one or more States, to show how empirical results from study could be applied to State cost-benefit analyses.

Agencies and organizations selected for funding will be knowledgeable in the areas of aquatic ecosystems and methods for estimating the monetary benefits associated with water quality improvements. This solicitation is now closed. Award information will be posted here when awards have been made. Applications submitted after the deadline were not considered.

If you have difficulty accessing the full announcement electronically, please contact: Todd Doley (doley.todd@epa.gov), 202-566-1160.


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