The U.S. has spent approximately $5 trillion to improve surface and drinking water quality since 1970, yet the social costs of water pollution remain poorly understood. Efforts to recover benefit estimates of improvement programs have been minimal, and few of those estimates look at benefits that vary across space. This stands in sharp contrast to advancements in the air pollution literature. In this talk, Dr. Kling will discuss a proposal for a national integrated assessment model (IAM) of nutrient pollution.
The proposal includes the development of a framework to assess the social cost of water pollution, incorporating the spatial variability of damages from pollution, and then develops valuation functions that estimate bene[1]fits of water quality improvements for three main categories: housing price impacts, water-based recreation, and drinking water treatment costs. Benefit functions are calibrated using spatially refined measures of water quality, housing values, recreation, and drinking water treatment plants across the continental U.S., which involves predicting baseline water quality levels of nutrient pollution based on a number of sources that provide measures of water quality in individual lakes, rivers, and streams.
Preliminary results suggest large and important impacts of nutrient pollution across the United States. Social costs are higher on the coasts and in urban areas, reflecting the importance of population in determining total damages. Ongoing efforts seek to better understand this variation in damages and the sensitivity of the results to assumptions regarding the extent of the market and the relationships that link nutrients to damages.