Grant for Nutrients Benefits Valuation
Valuing Reductions in Surface Water Nutrient Pollution
States’ freshwater nutrient pollution management objectives often involve setting ambient numeric criteria for parameters such as total nitrogen and chlorophyll a. Judging the appropri-ateness of a particular criterion involves measuring its monetary costs and benefits. While costs are often known, accessible tools for benefits assessment have historically been unavailable to state analysts.
In 2007, the Environmental Protection Agency selected North Carolina State University (NCSU) to receive a grant of $423,841 to conduct a project that will improve the application of empirical methodologies to the economic valuation of the benefits from reducing nutrient levels in the nation’s water bodies. The goal of this grant was to aid 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.
Approach of the Project
The approach used in the project can be summarized as follows. First, NCSU used expert elicitation (structured interviews with lake water quality experts) to generate data to estimate functions mapping objec-tively measured nutrient parameters - e.g. total nitrogen, chlorophyll a - to qualitative descriptions of lake water quality that were meaningful to potential users. Second, survey data from residents of Southeastern states was used to estimate a function that maps changes in water quality to economic values related to improved recreation possibilities. Third, the models were constructed at common temporal and spatial scales and designed so that the outputs from the water quality models could serve as input to the economic model.
Taken as a whole the project provides the ability to (a) estimate how an improvement in water quality meas-ured via a change in ambient pollution maps to a change in qualitative descriptions of lake water quality, and (b) examine how the change in qualitative quality maps to a per recreation visit dollar value of the change. This can be aggregated to an annual value ('willingness to pay' by lake users) using estimates of the total trips made to the quality-improved lake.
Results of the Grant
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The grant was finalized in 2012. North Carolina State University developed practical tools for use by state water quality managers who need to conduct benefits analysis.
There are three tools that together may be used to value the nonmarket benefits of numeric water quality criteria. One that can map measures of water quality obtained from a monitoring station network (e.g., total nitrogen, chlorophyll a) to a descriptive quality-level indicator. The other that can map changes in the descriptive quality indicator to dollar values. All three tools are available below
- The tool that can map measures of water quality obtained from a monitoring station network (e.g., total nitrogen, chlorophyll a) to a descriptive quality-level indicator.
- Water Quality Report (PDF) (50 pp, 195K)
- A mechanism is needed that links measured nutrient pollution (e.g., ambient nitrogen, phosphorous) to a qualitative ranking of water quality, which can then be tied to an economic model of valuation. In this report we describe designing and fielding a survey that uses stated preference methods to value water quality attributes.
- Final Report on Stated Preference Surveys (PDF) (85 pp, 791K)
- This tool that can map changes in the descriptive quality indicator to dollar values. This tool is explained with the user manual. The user manual provides background information and instructions for using the Water Quality Benefits Spreadsheet to estimate the benefits of meeting a set of nutrient targets at a single lake undergoing policy analysis. Appendix E contains the user manual that accompanies the spreadsheet tool and explains the equations and data behind the tool
- Water Quality Benefits Spreadsheet (Excel, 167K)
- User Manual for the Water Quality Benefits Spreadsheet (PDF) (21 pp, 65K)
For more information about this grant, please contact Julie Hewitt at 202-566-1031 or firstname.lastname@example.org.