TMDL COST ANALYSIS: A WATERSHED APPROACH

Controlling water pollution can follow many courses. Economics has an important, if not vital, role to play in identifying policy strategies that can enhance water quality at least cost. An economic framework can coordinate policy formulation among different levels of government and help to unify policies across regions. Economics also determines the optimal level of water quality protection. Society does not benefit from overly stringent or costly water quality goals. Measuring the benefits of water quality protection in economic terms is difficult, since many benefits occur outside easily observable market conditions. Even where water quality impacts on markets are observed it can be difficult to ascertain just how water pollution affects the ability of a resource to provide economic goods and services. Nevertheless, information on costs and benefits is essential to developing socially optimal water quality protection policies.Stekoa Creek, a 44,000 acres watershed in Northeast Georgia, offers a case study in which TMDL implementation of the most cost-effective management scenario to solve the water quality problem is identified and recommended. This study links physical and economic models to facilitate the identification of economically efficient solutions to water quality management. Results predict compliance with state water quality standards and highlight economic benefits, in addition to minimal cost, associated with the recommended scenario. Cost of the recommended scenario is 128,975. This investment is significantly less than original estimates, and offers hope that national water quality management can be achieved with reasonable resource allocations. Economic benefits resulting from the implementing of a cost-effective management scenario will increase social welfare in the watershed area by an estimated 3,769,671 over the next 25 years as compared to a no-action scenario.