Increasing global demand for agricultural commodities has led to widespread intensification of farming practices. In particular, phosphorus (P) inputs have risen dramatically, leading to tradeoffs between increases in agricultural production and water quality degradation. Effectively managing these tradeoffs requires information about the magnitude and distribution of P-related benefits and costs to society. Here, we quantify the benefits of meeting P reduction targets for the Lake Champlain Basin within the U.S. state of Vermont. In 2016, the U.S. EPA mandated that P loading in the Vermont-portion of the basin be reduced by 34%. The cost of meeting this target has been estimated at $1.3 billion, but the resulting gains in social welfare have not been quantified. Estimating these benefits is critical for generating political support for investing in water quality improvements and for designing efficient policies to meet reduction targets. To do this, we use an integrated assessment model to assess how land use policy scenarios affect water quality indicators in Lake Champlain, via reductions in P loading from the landscape. We then link these indicators with a suite of monetary and non-monetary benefits that include: tourism expenditures, housing prices, recreational visitation, and mental and physical health outcomes.
Results/Conclusions
Land use policy scenarios that result in forest expansion and widespread implementation of agricultural best management practices have the potential to reduce P loading by over 40%, corresponding to increases in water clarity during summer months and fewer days with harmful algal blooms. These improvements in lake water quality create benefits to society that exceed the estimated implementation costs. The marginal benefits of reduced P loading vary spatially, depending on retention rates along the hydrological flow path, the susceptibility of lake embayments to algal blooms, and differential demand for improved water quality among stakeholders. Due to legacy P accumulated in soil across the landscape and in lake sediment, many of the benefits of reduced loading will not be experienced for years or decades. Consequently, the magnitude and temporal distribution of benefits of improved water quality are highly sensitive to the applied discount rate. Our findings demonstrate that achieving nutrient reduction targets have the potential to create benefits for society; however, these gains in social welfare are contingent on careful spatial targeting and a sufficiently low discount rate to justify the substantial upfront capital investment.