Valuing the Potential Benefits of Water Quality Improvements in Watersheds Affected by Non-Point Source Pollution

Abstract

Nonpoint source (NPS) pollution has been identified by the US Environmental Protection Agency (EPA) as “the nation’s largest water quality problem”. Urban development, septic systems, and agricultural operations have been identified as the major sources of diffuse pollution in surface and ground water bodies. In recent decades, urban and agricultural Best Management Practices (BMP) have been developed in several states to address agricultural water quality and water use impacts, including the reduction of nutrient loads to help meet water quality standards. Compliance with BMPs is associated with some costs to local governments, homeowners, and agricultural operations, but the improvements in water quality associated with BMP adoption are expected to yield significant benefits to society in the form of improved recreational opportunities, navigation, flood control, and ecosystem health. The development of sound policies and decision making processes require balancing the costs of BMP adoption to the agricultural operations with the social benefits to be derived from the improved water quality. In this paper we develop a benefits transfer model to provide estimates of the economic benefits of properly implemented and effective Best Management Practices (BMP) throughout the state of Florida. These benefit estimates can be used in a cost-benefit framework to determine the optimal level of BMP adoption throughout the state of Florida and provide a framework for other regions to estimate the potential benefits of BMP-mediated water quality improvements.