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Increased interest in TMDLs for agricultural nutrients has characterized state and local efforts toward nonpoint source pollution reduction. Consequently there is greater need for estimation of pollutant reduction costs at the farm level as well as more aggregate levels in order to reduce the overall cost of pollution abatement. Computer simulation models can help meet this need in a variety of ways.

This paper explains economic analysis of TMDLs and why simulation models are preferred for TMDL applications. Illustrated are various options that can benefit from economic model simulations and why these results need to be reliable. Factors that can be taken into account to ensure reliability of economic simulations are also presented. Several data items need to be developed and rigorous calibration of the models is imperative. Finally, additional benefit can be derived from linking economic and environmental simulation models in a dynamic framework.