Linda M. Chappell, PhD U S Environmental Protection Agency October 3, 2002

1. Eutrophication of Estuaries and Acidification of Freshwater Bodies in the United States TheBenefits and Costs of the Clean Air Act 1990 -2010& New Developments Linda M. Chappell, PhD U S Environmental Protection Agency October 3, 2002

2. Acidic surface waters in regions surveyed by the National Surface Water Survey Deposition data measured by CASTNet and NADP, 1997-1999 Acid Rain: Overview • Acid deposition is still a regional problem • Highest sulfate deposition occurs in the Midwest and northeastern United States, both adjacent to and downwind of the highest emitting areas • Impacts occur in both the eastern U.S. and mountainous areas of the West • Effects of acid deposition include: • Acidification of lakes and streams, making them unsuitable for fish and other aquatic life • Damage to forests through acidification of soil, depletion of soil nutrients, and direct injury to tree leaves and needles • Harm to material and cultural resources, including buildings, statues and monuments

3. Acidic Deposition • Predominant causes are sulfuric and nitric acid formed from sulfur dioxide and nitrogen oxides • Deposition occurs through three pathways: wet deposition, dry deposition, and cloud-water • Sources of sulfur dioxide are primarily coal and residual oil combustion (utilities are major contributor) • Sources of nitrogen oxides are internal combustion engines, furnaces, boilers, engines • Results in acidic surface waters, negative impact on acid sensitive fish populations, competitive advantage for acid-resistant species

4. Estuarine Eutrophication Nutrient Sources and Effects on Estuaries 1999 NOAA Report. National Estuarine Eutrophication Assessment

5. Estuaries with High Levels of Eutrophication 1999 NOAA Report. National Estuarine Eutrophication Assessment.

6. The Cost and Benefits of the Clean Air Act 1990 - 2010 • Assess the benefits and costs of the Clean Air Act Amendments (CAAA) for freshwater acidification and estuary eutrophication for the period 1990 - 2010 • Benefit Assessment Approach: • Identify endpoint – service flow • Provide a defensible link between changes in air pollution and quality or quantity of service flows • Quantitative models to monetize these changes

7. Acidification of Freshwater Lakes and Streams • Evaluated recreational fishing benefits in the Andirondacks regions of New York • Scenario specific (with and without CAAA) acid deposition modeled using Regional Acid Deposition Model (RADM) • Model of Acidification of Groundwater in Catchments (MAGIC) used to estimate impact of sulfur and nitrogen deposition on lake acidity (pH and Acid Neutralizing Capacity (ANC))

8. Benefits of CAAA relating to recreational fishing in the Andirondacks • Benefit Monetization -Random Utility Model for recreational fishing that allows for substitution among sites and fisheries in the region based upon water quality parameter changes (Montgomery and Needelman (1997)) • Annual benefits range from $12 to $88 million (mean $50 million) in 2010 (1990$) • Caveats, limitations, and uncertainties

9. Eutrophication of Estuaries • Illustrative estimate of potential benefits from nitrogen air deposition reductions to US estuaries • Assesses changes in nitrogen air deposition directly to estuary water bodies using a geographical information system (GIS) approach and land use pass through factors for deposition to watershed areas for the Chesapeake Bay, Tampa Bay, Long Island Sound • Decreases in nitrogen deposition range from 38 to 43 percent for the estuaries evaluated

10. Benefit Estimation • Uses an avoided cost benefit estimation approach for the three estuaries • Monetary benefits for the three estuaries range from $376 million to $1.5 billion annually in 2010 (1990 $) • Benefits are extrapolated to US east coast estuaries that are ranked as moderately or highly susceptible to eutrophication and benefits for nitrogen deposition reductions for these additional estuaries range from $262 million to $2.8 billion annually in 2010 (1990$). • Key issue - benefit estimate are illustrative and not added to the overall monetary benefits of the CAAA in 2010.

11. Next Steps in the Process • Damage function approach • Ideally wish to establish a platform that links: • Air deposition – Evaluate air deposition changes • Watershed/Estuary Models – Evaluate water quality impacts • Biological and Economic Endpoints • Economic Valuation – Estimate monetary benefits • Challenging Task!

12. Progress to Date • Air deposition models are available – Regulatory Modeling System for Aerosols and Deposition (REMSAD) Regional Acid Deposition Model (RADM) • National Water Pollution Control Abatement Model (NWPCAM) – water quality model developed by the US EPA Office of Water • National water quality model for freshwater rivers and streams • Used to evaluate policy alternatives • Linked to economic valuation study (Carson - Mitchell)

13. Next Steps • Add air deposition modeling to NWPCAM • Expand capabilities to watershed/estuaries to model potential water quality improvements • Establish relevant biological and economic endpoints • Valuation studies – studied planned for California coast by US EPA National Center for Environmental Economics