Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin

Liu, Hongxing; Zhang, Wendong; Irwin, Elena G.; Kast, Jeffrey; Aloysius, Noel; Martin, Jay F.; Kalcic, Margaret

doi:10.3368/wple.96.4.510

Cited by 21 publications

(18 citation statements)

References 36 publications

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“…Interesting is also the use of economic policy instruments to curb the emission of TP into the GL, for example, explored by Liu et al. (2020) by imposing a tax on the price of fertilizer to achieve a 40% reduction in western Lake Erie on the US side.…”

Section: Discussionmentioning

confidence: 99%

Estimating the Total Economic Costs of Nutrient Emission Reduction Policies to Halt Eutrophication in the Great Lakes

Garcia

Brouwer

Pinto

2022

Water Resources Research

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The Great Lakes (GL) in North America are among the largest freshwater resources on the planet facing serious eutrophication problems as a result of excessive nutrient loadings due to population and economic growth. More than a third of Canada's GDP is generated in and around the GL. Hence, the economic interests affected by pollution and pollution control are high. New policies to reduce pollution are often insufficiently informed due to the lack of integrated models and methods that provide decision‐makers insight into the direct and indirect economic impacts of their policies. This study fills this knowledge gap and estimates the impacts of different total phosphorus (TP) restriction policy scenarios across the GL. A first of its kind multi‐regional hydro‐economic model is built for the Canadian GL, extended to include TP emissions from point and non‐point sources. This optimization model is furthermore extended with a pollution abatement cost function that allows sectors to also take technical measures to meet the imposed pollution reduction targets. The latter is a promising new avenue for extending existing hydro‐economic input‐output modeling frameworks. The results show decision‐makers the least cost‐way to achieve different TP emission reduction targets. The estimated cost to reduce TP emissions by 40% in all GL amounts to a total annual cost of 3 billion Canadian dollars or 0.15% of Canada's GDP. The cost structure changes substantially as policy targets become more stringent, increasing the share of indirect costs and affecting not only the economic activities around the GL, but the economy of Canada as a whole due to the tightly interwoven economic structure.

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Section: Discussionmentioning

confidence: 99%

Estimating the Total Economic Costs of Nutrient Emission Reduction Policies to Halt Eutrophication in the Great Lakes

Garcia

Brouwer

Pinto

2022

Water Resources Research

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“…These models improve assessment of the value of the system-wide damages due to nutrient loss from agriculture, the extent to which best management practices can improve water quality and the design of policy to achieve water quality improvements cost effectively. Liu et al (2020) show that that economic adoption models by themselves will overstate the potential for best management practices to reduce nutrient loadings by ignoring biophysical complexities. Similarly, Ferin et al (2021) show that biophysical modeling alone will overestimate the potential for bioenergy crops to reduce nutrient run-off in the Mississippi River Basin because they ignore the role that economic and biofuel policy incentives will play in how much land is likely to be converted to these crops, where these crops are placed in the region, the extent to which they will displace the production of nitrogen intensive corn in the Midwest, and the unintended consequences of current policies.…”

Section: Examples Of High Impact Convergence Research In Agricultural...mentioning

confidence: 99%

Breakthroughs at the disciplinary nexus: Rewards and challenges for applied economists

Khanna

2022

American J Agri Economics

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Complex societal challenges call for solutions that require innovative thinking and new ways of problem-solving that creatively combine knowledge from multiple disciplines. It is imperative that applied economists engage in interdisciplinary research and apply systems thinking and analytical approaches to analyzing trade-offs and behavioral drivers of human choices to design strategies to achieve societal goals. Agricultural and applied economics have a foundation in interdisciplinary research, real-world problem solving and engagement with stakeholders, but face increasing pressures for specialization. This address discusses strategies for conducting interdisciplinary research that rely on T-shaped research skills, team science and aggregating expertise from different disciplines to codevelop solutions to challenging societal problems. It provides some examples of ground-breaking research that has emerged in applied economics due to the collaborations with and insights provided by scholars from other disciplines. The paper concludes with a discussion of the institutional and discipline-related challenges to conducting interdisciplinary research and a call to the profession to foster, recognize and value interdisciplinary research.

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“…To mitigate future risk, the United States and Canada signed the 2012 Great Lakes Water Quality Agreement (GLWQA) to reduce spring phosphorous loadings by 40% by the year 2025 (GLWQA, 2016). However, there is little consensus on how this goal should be met, with proposed management solutions ranging from installation of riparian buffer zones in ecologically sensitive areas (Scavia et al, 2016) to a tax on fertilizer use (Liu et al, 2020; Sohngen et al, 2015). Assessing the cost effectiveness and distributional consequences of alternative policies is also challenging.…”

Section: Introductionmentioning

confidence: 99%

“…Assessing the cost effectiveness and distributional consequences of alternative policies is also challenging. A fertilizer tax on phosphorus for example could be effective in reducing nutrient runoff (Liu et al, 2020; Sohngen et al, 2015) but is politically challenging as most of the burden is placed on farmers living in the Lake Erie watershed.…”

Section: Introductionmentioning

confidence: 99%

Staying afloat: The effect of algae contamination on Lake Erie housing prices

Wolf

Gopalakrishnan

Klaiber

2022

American J Agri Economics

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Lake Erie has experienced unprecedented harmful algal blooms since the early 2000s, prompting the 2012 Great Lakes Water Quality Agreement between the United States and Canada, which aims to reduce lakewide phosphorous loadings by 40%. Little is known about the economic benefits from this agreement, especially to near lake homeowners. We provide key information on the benefits of harmful algal bloom cleanup by linking housing transactions in 2003 to 2015 from seven Ohio counties bordering Lake Erie with measures of water quality using remote-sensing images. We further control for endogenous algae production using instrumental variables derived from hydrological processes that link Maumee River runoff to nutrient concentrations in Lake Erie. Using a semiparametric approach, we find the impact of harmful algal blooms on housing prices is spatially limited to properties within 1.2 km of Lake Erie. For the average near lake homeowner, a 1 μg/L increase in algae concentrations is expected to decrease property values by 1.7% ($2205). In aggregate, fulfilling the Great Lakes Water Quality Agreement will provide a yearly benefit of up to $42.9 million, fully covering the current annual expenditure on water quality improvement.

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Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin

Cited by 21 publications

References 36 publications

Estimating the Total Economic Costs of Nutrient Emission Reduction Policies to Halt Eutrophication in the Great Lakes

Estimating the Total Economic Costs of Nutrient Emission Reduction Policies to Halt Eutrophication in the Great Lakes

Breakthroughs at the disciplinary nexus: Rewards and challenges for applied economists

Staying afloat: The effect of algae contamination on Lake Erie housing prices

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