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DWQ Home > Statewide Nutrient Criteria Development > Economic Evaluation

Nebo Creek at Forest Service boundary September 2009Statewide Nutrient Criteria Development: Economic Evaluation

Background

The Utah Division of Water Quality (DWQ) is funding a study to quantify the economic benefits and costs of implementing nutrient criteria for surface waters in Utah. Human-caused nutrient inputs of nitrogen and phosphorus to the nation's waters have been identified as significant threats to aquatic life and recreational uses. In response, the US Environmental Protection Agency has called upon States to develop and adopt numeric nutrient criteria. Understanding the costs and benefits associated with the implementation of nutrient criteria is important for informing decisions to increase economic welfare. The use of economic data to inform regulatory decisions requires a comprehensive evaluation of the values that people derive from their direct and indirect usues of Utah's water bodies as well as the value that residents place on preserving and stewarding the state's surface waters (i.e., non-use value).

Economic Benefits Study

Protecting water quality is important to Utah's economy and the quality of life of Utahns. Excess nutrients (nitrogen and phosphorus) from treated wastewater, stormwater, and agricultural runoff can result in nuisance algae growth which degrades aesthetics, recreation and aquatic life in waterbodies. This study poses the question: What are the economic benefits to Utahns maintaining and improving the quality of the state's lakes, rivers, and streams? Through surveys administered to Utah households, the study found that residents place importance on protecting waters from excess nutrients for quality of life and recreation; for instance, 97 percent of Utah households surveyed indicated that it was important to maintain water quality for future generations. Utah households report that they are willing to pay from $70 million to $271 million a year to protect and improve waters that are threatened by increasing levels of nutrients. Households who visit lakes, rivers and streams in Utah stated, and showed through their trip choices, a clear preference for recreating at cleaner waterbodies. The study found that annual economic benefits derived from enhancing recreational trips by improving water quality in Utah's waters accounted for about $48 million of the total economic value. The remainder is due to other quality of life factors including sustaining water quality for future generations. Finally, this study estimated that residents of Utah spend about $1.4 to $2.4 billion a year on trips to the state's waters for water-based recreation activities. In this way, they not only derive a great deal of enjoyment from the state's water resources, but at the same time they make an important contribution to the state's economy.

Benefit Cost Analysis (BCA)

The economic evaluation will consist of a benefit cost analysis of implementing statewide nutrient standards. The economic cost categories that are being evaluated include: wastewater treatment plant upgrades, stormwater source control and treatment, nonpoint source pollution (i.e. agriculture) control and treatment, and regulatory agency administration costs. The economic benefit categories include recreation value, non-use value (i.e. quality of life), property value, and drinking water treatment cost savings.

Contact

Nicholas von Stackelberg

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