Concerns about nutrient pollution in the Chesapeake Bay have led to the establishment of pollution limits—total maximum daily loads (TMDLs)—which, by 2025, are expected to reduce nitrogen loadings to the Bay by 25 percent and phosphorous loadings by 24 percent from current levels. This paper outlines how the benefits associated with achieving the Chesapeake Bay TMDLs could be measured and monetized. We summarize studies that measure the benefits of improved water quality in the Bay and evaluate whether these studies could be used to value the water quality benefits associated with the TMDLs.In cases where studies conducted in the Bay watershed either do not exist or are out of date, we discuss whether results from studies conducted elsewhere could be transferred to the Chesapeake Bay. We also discuss original studies that would be useful to conduct in the future.
The Chesapeake Bay is the largest estuary in the United States. It serves as a major commercial and recreational resource for the 16.6 million residents in its watershed, which covers portions of six states (Virginia, Maryland, Delaware, Pennsylvania, New York, and West Virginia) and the District of Columbia. The Bay also serves as a regional environmental landmark, and its health is valued by many individuals outside the watershed.
On December 29, 2010, in reaction to continued poor water quality in the Chesapeake Bay and its tidal tributaries, the U.S. Environmental Protection Agency (EPA) established total maximum daily loads (TMDLs) for the Bay. They are designed to meet state water quality standards by reducing nitrogen, phosphorus, and sediment pollution to the Bay. Yet achieving the anticipated improvements in water quality comes at a cost.
In a new RFF Discussion Paper, Senior Fellow Maureen Cropper and Research Assistant William Isaac consider the following question: What is the dollar value of the benefits that will result from achieving the TMDLs in the Chesapeake? The authors outline how the benefits associated with achievement of these standards could be measured and monetized, targeting six areas of benefits—property values, recreational and commercial fishing, swimming, boating, and nonuse values. In each case they describe the methods used to monetize benefits, summarize the state of the literature, and discuss whether results of existing studies could be extrapolated to value the benefits of the TMDLs. In cases where adequate research does not exist, they discuss whether results from studies conducted elsewhere could be transferred to the Chesapeake Bay. Cropper and Isaac conclude by discussing what original studies would be useful contributions in the future.