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Published by the American Society of Agricultural and Biological Engineers, St. Joseph, Michigan

Citation:  Watershed Management to Meet Water Quality Standards and Emerging TMDL (Total Maximum Daily Load) Proceedings of the Third Conference 5-9 March 2005 (Atlanta, Georgia USA) Publication Date 5 March 2005  701P0105.(doi:10.13031/2013.18064)
Authors:   E. Osei and K. Keplinger
Keywords:   Trading, nonpoint sources, point sources, pollution, TMDL, cost effectiveness, equity, risk, uncertainty

As more agricultural watersheds across the country are brought into the TMDL process, issues of economic efficiency, equity, and uncertainty continue to impede TMDL development, implementation, and performance. In particular, financial implications of various implementation options are often left unaddressed while attention is focussed primarily on the water quality impacts of those options. Employing basic economic analyses, however, can result in costeffective TMDL implementations that also address the concerns of all parties.

This paper discusses how economic principles can be used to address cost effectiveness, uncertainty, and equity issues to arrive at reasonable compromises that are financially beneficial to all parties in a TMDL while meeting the load reduction targets required. In a largely theoretical development, we explore the roles of various TMDL implementation options and look at how basic economic principles can be used to achieve cost-effectiveness within limits of desired equity and risk considerations. This paper shows that the overall cost associated with TMDLs can be reduced by allowing for pollutant trading and other flexible options, and that equity and risk concerns can be incorporated within the framework of a broad spectrum of incentive-based options.

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