Quantifying the social benefits and costs of reducing phosphorus pollution under climate change

Abstract

Excess phosphorus loading to waterbodies has led to increasing frequency and severity of harmful algal blooms, negatively impacting economic activity and human health. While interventions to improve water quality can create large societal benefits, these investments are costly and the value of benefits is often unknown. Understanding the social and economic impacts of reduced phosphorus loading is critical for developing effective land use policies and for generating public and political support for these initiatives. Here, we quantify the social benefits and costs of improving water quality in Lake Champlain under a range of phosphorus reduction and climate change scenarios between 2016 and 2050. We use statistical models to link water quality outputs from an established integrated assessment model with three categories of benefits: tourism expenditures, property sales, and avoided human health impacts. We estimate the costs of reducing phosphorus loading using data reported by the State of Vermont. We find that under the most aggressive phosphorus reduction scenario, the total benefits of improved water quality are $55 to $60 million between 2016 and 2050. Over this 35 year time horizon, the combined benefits do not outweigh the costs under any scenario. If the time horizon is extended to 2100 or beyond, however, the benefits may exceed the costs if the applied discount rate is less than 3%. Importantly, we almost certainly underestimate the value of clean water, due to the omission of other types of benefits. Despite this uncertainty, our study provides a tractable framework for disentangling the complex relationships between water quality and human well-being, and illuminates the value of reductions in phosphorus loading to society.