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

Jorge A. Garcia-Hernandez*, Roy Brouwer, Rute Pinto

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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Abstract

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.

Original languageEnglish
Article numbere2021WR030772
Pages (from-to)1-17
Number of pages17
JournalWater Resources Research
Volume58
Issue number4
Early online date1 Apr 2022
DOIs
Publication statusPublished - Apr 2022

Bibliographical note

Funding Information:
The research presented in this paper was carried out under the scope of the Canada First Research Excellence Fund (CFREF) funded research program Global Water Futures, in particular the projects Integrated Modelling Program for Canada, Lake Futures, and Agricultural Water Futures.

Publisher Copyright:
© 2022. American Geophysical Union. All Rights Reserved.

Funding

The research presented in this paper was carried out under the scope of the Canada First Research Excellence Fund (CFREF) funded research program Global Water Futures, in particular the projects Integrated Modelling Program for Canada, Lake Futures, and Agricultural Water Futures.

Keywords

  • economic costs
  • eutrophication
  • Great Lakes
  • hydro-economic model
  • phosphorus

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