Post on 26-Jun-2015
description
Gerald KauffmanUniversity of Delaware
Delaware River Redux
Oct 29, 2013
Water
Wooter
PolicyHistoryScienceEconomics
Federalist model of shared power in water management
1961 DRBC Compact manages “without regard to political boundaries.”
Global model of efficient watershed governance.
4 states, 24 counties, and 838 municipalities
8 Senators, 25 Members of HR19 federal, 43 state, 14
interstate agencies Use charges on water
allocations ($0.08/1000 gal.).
United StatesPresident
Barack Obama
New YorkGovernor
Andrew Cuomo
PennsylvaniaGovernor
Corbett
New JerseyGovernor
Chris Christie
DelawareGovernor
Jack Markell
Delaware RiverBasin Commission
USDANRCSUSFS
Congress
25Congressmen
8SenatorsHomeland
SecurityFEMA
Coast Guard
InteriorNPS
USFWSUSGS
EPA
DefenseUSACOE
CommerceNOAANWS
6 Countiies
New York City35 Towns
17 Counties
PhiladelphiaAllentown125 Towns
CamdenTrenton
330 Towns
11 Counties
Wilmington37 Towns
3 Counties
Del. RiverkeeperNatural Lands Trust
Del. Estuary ProgramNature Conservancy
Sierra ClubWRADRB
13,000 sq mi8.2 million people11th most populous stateDrinking water: 5% of
U.S.1st, 7th largest metro.
economiesDel. (74% of pop.)NJ (35% of pop.)NY (55% of pop.)Pa. (43% of pop.)
The Delaware River Basin
PopulationDelaware River Basin
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Population ChangeDelaware Basin, 2000-2010
80,155843
94,752
3,708
313,485
492,942
0
100,000
200,000
300,000
400,000
500,000
600,000
Population Change by CountyDelaware Basin, 2000-2010
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
1609
1682
1682
1739
1800s
1885
1945
HMS Nelson
1945
1961
DO in the Delaware River (Sharp 2010)
1961: JFK signs DRBC Compact.1972: Congress authorizes Clean Water Act1996: Congress adds Del. Estuary to National Estuary Program.2013: Delaware River revival is underway.
Bald Eagle Nesting Pairsin the Delaware River Basin
0
10
20
30
40
50
NestingPairs
Delaware New Jersey New York Pennsylvania
Bald Eagles
American shad
Wastewater treatment 90% BOD removal: $95 M/year
Natural recycling capacity of wetlands reduces 3.5 lb/acre/day of BOD per day to treat remaining 10%.
463,000 acres of wetlands in Del. Estuary watershed
Can treat 590 million lb of waste/yearWetlands removal costs: $2.00/lb BOD/yearWetlands replacement value: $1.18 billion/year
123,000 jobs$4.3 billion wages$24 billion sales$25 million sport fishing non-market value$1 million in commercial fish landingsWetlands replacement value $638 million.
The Delaware River Basin in Del., NJ, NY, and Pa. contributes:
1. $25 billion in annual economic value from recreation, water quality, water supply, ecotourism, forest, agriculture, open space, and port benefits.
2. Ecosystem goods and services worth $21 billion per year, net present value (NPV) = $683 billion.
3. Over 600,000 jobs with $10 billion in wages.
Fish Landings
$34 million$0.60/lb58 million lbsource: NMFS
Skiing
$325 million1,753 jobs9 ski areas1,005 acres1 mgd1.9 million ski visits
source: PSAA 2010
Paddling
$362 million4,226 jobsGear: $66 milTrips: $296 mil620,860 paddlers
source: Outdoor Industry Assoc. 2006
Upper Del. & Del. Water Gap NRA
$41.2 million448 jobs367,000 visitors113 miles Natl.
Wild & Scenic River
Over 70,000 acres
source: Cordet et al. USNPS, USFS 1990
USFWS (Carver and Caudill 2007)16,000 acres4th most visited refuge271,000 recreational visits (2006)80% visitors from other states6th most valuable refuge$20.2 million to economy, food, lodging, equip.,
travel$13.4 million from bird watching alone198 jobs with $5.5 million incomeFY06 annual budget $804,000, benefits $20.2
millionBenefit-cost ratio of 23:1.
Canoe/Kayak/Rafting
$9 million225 jobs37 liveries225,000 visits
source: Canoe Liveries in Del., NJ, NY, Pa.
Powerboating$395 million232,000 registrationsNY, Del., Pa., NJ
ranked 3rd, 7th, 17th, and 23rd in sales
source: National Marine Manufacturers Assoc. 2010
Fishing, Hunting, Bird Watching
Fishing $576 million(18 trips/angler, $53/trip)
• Hunting $340 million(16 trips/hunter, $50/trip)
• Bird Watching $561 million(13/trips/yr, $27 trip)
Source: USFWS 2006
America’s Founding Fish
Shad Fishing
$6.5 million63,000 trips$102/trip
Pa. Fish & Boat Commission, 2011
Wild Trout Fishing
$29 million350 jobs
(Maharaj, McGurrin, and Carpenter, 1998)
Delaware Water Gap Natl. Rec. Area
$100 million 7,600 jobs 4,900,000 visits490,000 local trips3,600,000 non-local trips490,000 motel visits240,000 camp overnights
Stynes and Sun (2002)
Public Water SupplyState Supply (mgd) Value ($4.78/1000
gal)Del. 40 $70NJ 284 $495NY 800 $1,396Pa. 679 $1,185
1,803 mgd $3,146 million
Public Water Supply WithdrawalsDelaware River Basin
PA, 679 mgd
NY, 800 mgd
NJ, 284 mgd
DE, 40 mgd
Wetlands - $6.8 billionFarms - $4.8 billionForests – $8.6 billion
Ecosystem Goods and Services
Ecosystem Services ValueDelaware River Basin
0
2
4
6
8
10
Del. NY NJ Pa.
$ b
illio
n/y
r
Natural Capital Value of Ecosystems in the Delaware River Basin
$44 M $166 M $180 M $412 M$1,055 M
$4,823 M
$5,759 M
$8,591 M
0
2,000,000,000
4,000,000,000
6,000,000,000
8,000,000,000
10,000,000,000
$/yr
Marine & Water-related Construction
Fishing & AquacultureShip/Boat BuildingTourism/RecreationMarine Transportation Hunting/Fishing/
Wildlife Recreation-related
FarmingWater/Wastewater
UtilityPortsWatershed
Protection/Management
>600,000 jobs ($10 billion in wages)
0
100
200
300
400
500
600
0 1 2 3 4 5
Ca
pit
al a
nd
O&
M C
os
ts($
mil
lion
)
Summer Average DO (mg/l)
Costs to Achieve DO Objectives (1975-1980)Delaware Estuary near Philadelphia
Max Cost Min Cost
Recreational benefits of improved water quality in the Delaware Estuary (FWPCA 1966)
Objective DO
Summer (mg/l)
BOD/COD Residual (lb/day)
% Pollution Removal
Total Benefits ($1964)
($ million)
Marginal Benefits ($1964)
($ million)
I 4.5 100,000 92%-98%
160-350
II 4.0 200,000 90% 140-320 20-30
III 3.0 500,000 75% 130-310 10-10
IV 2.5 500,000 50% 120-280 10-30
V 0.5 status quo 0 0
River basin firm internalizes the externalities
Effluent charges should be considered as a method for attaining water quality improvement.
At an effluent charge of 10 cents per pound of BOD, the agency would collect $7 million per year (rent on the assimilative capacity of the stream).
A charge of 8 to 10 cents per pound of oxygen-demanding material discharged produces relatively large increases in critical dissolved oxygen levels;
Consumer surplus is the difference between the amountthat consumers actually pay and the amount that they would have been willing to pay.
Price ($/1000 gal)
Quantity (gal)
Demand
SupplyConsumer Surplus
$
D.O. (mg/l)
Marginal Benefits (MB)
Marginal Costs (MC)
qp
StateUrban(%)
Ag(%)
Forest(%)
NY 2% 11% 87%
PA 23% 20% 57%
NJ 17% 29% 54%
DE 25% 28% 46%
DRB 17% 20% 62%
River Basin Drainage
Area (mi2)
Nitrogen Load
(ton/yr)
Unit N Load
(ton/mi2/yr) Susquehanna 27,490 73,040 2.7 Delaware 11,819 50,525 4.3 Potomac 14,658 44,707 3.0 Hudson 13,363 28,711 2.1 James 10,339 17,482 1.7 Connecticut 11,261 17,236 1.5
Nitrogen LoadsDelaware River Basin
Agriculture14,625 tons/yr
29%
Suburban/Urban
7,073 tons/yr14%
Atmospheric Deposition
6,063 tons/yr12%
Wastewater23,241 tons/yr
45%
3%
8%7%
28%
16%
9%
29%
Per-Pound Costs of Reducing Nitrogen Pollutionin the Chesapeake Bay Region
$75.00
$27.65$21.90
$7.00 $4.70 $3.30 $3.20 $3.20 $3.10 $1.50 $1.20
$92.40
0
20
40
60
80
100
($/lb
N)
$45M
$130M $132M$141M
$448M
0
100
200
300
400
500
Co
st (
$/yr
) Mill
ion
s
Cost by Source for Median 32% Nitrogen ReductionDelaware Basin
0
100
200
300
400
500
Cost
s ($/
yr)
Mill
ions
Cost by State for Median 32% Nitrogen ReductionDelaware Basin
Agriculture
Urban/Suburban
Wastewater
Atmospheric NOX
0
50
100
150
200
Co
sts
($/y
r) Mill
ions
Cost by Watershed for 32% Nitrogen ReductionDelaware Basin
Agriculture
Urban/Suburban
Wastewater
Atmospheric NOX
$132M
$13M$32M$37M
$124M$104M
AgricultureConservation
0
10
20
30
40
50
0 100 200 300 400 500 600 700 800 900
N L
oad
Red
uct
ion
(mil
lio
n lb
/yr)
Cost to Reduce N Loads ($ million/yr)
Nitrogen Marginal Abatement Cost (MAC)Delaware Basin
Reduce N by 20% (25thPercentile)
Reduce N by 32% (Median)
Reduce N by 48% (75thPercentile)
WastewaterTreatment
AtmosphericDeposition
Urban/Suburban Stormwater
Nitrogen Marginal Abatement Cost CurveDelaware Basin
AgriculturalConservation
0
10
20
30
40
50
0 100 200 300 400 500Costs to Reduce N Loads by 32% ($ million)
N L
oad
Red
uct
ion
(mill
ion
lb/y
r)
WastewaterTreatment
AtmosphericDeposition
Urban/Suburban Stormwater BMPs
0 0$6M $6M
$23M $26M$19M
$68M
0
20,000,000
40,000,000
60,000,000
80,000,000
An
nu
al B
enef
its
($)
Benefits of Improved Water QualityDelaware Basin ($2010)
Medium WQ High WQ
0 0 0 1 $4M $6M0 $1M
$5M
$16M
$46M
$68M
0
10
20
30
40
50
60
70
80
An
nu
al B
enef
its
($)
Mill
ions
Benefits of Improved Water QualityDelaware Basin ($2010)
Medium WQ High WQ
0
10
20
30
40
50
1980 1985 1990 1995DO
(m
g/l
x 1
0)
an
d C
atc
h p
er
Ha
ul
Catch per Haul vs. Dissolved OxygenDelaware River at Ben Branklin Bridge
Ben Franklin Br DO American Shad White Perch Striped Bass
American ShadCPH = 0.47(DO) - 3.27R2 = 0.66
White PerchCPH = 0.68(DO) - 2.29R2 = 0.46
Striped BassCPH = 0.13(DO) - 0.40R2 = 0.53
Increased Property ValueDue to Improved Water Quality (EPA 1973)
0%
5%
10%
15%
20%
0 1000 2000 3000 4000 5000
Distance from Water (ft)
Inc
rea
se
d V
alu
e (
%)
Resources for the Future water quality ladder (Carson and Mitchell 1993)
$102M$76M
$178M$151M
$115M
$266M
0
50
100
150
200
250
300
Boatable Fishable Total WQ
An
nu
al W
TP
($) M
illio
ns
Water Quality Use Support
Willingness to Pay for Improved Water Quality Delaware Basin ($2010)
Low Bound High Bound
Benefits of improved water quality in the Delaware River in $2010
Category Activity Existing Value (DO 3.5 mg/l) ($ million/yr)
Benefits (DO 5 mg/l) ($ million/yr)
Low High Low High Use Recreation Viewing, Boating, Fishing 4.5 5.6 55 68 Boating 159 350 46 334 Fishing 216 337 129 202 Shad fishing 0 6.5 0 3.9 Bird/Wildlife Watching 307 325 15 33 Waterfowl Hunting 1.4 16 0.1 1.6 Swimming 0 0 0 0 Beach Going 6 50 2 16 Commercial Fishing 34 34 0 17 Agriculture 0 0 8 188 Navigation 81 81 7 16 Indirect Use Property Value 333 333 13 27 Water Supply Municipal Water Supply 196 196 12 24 Industrial Water Supply 140 140 8 17 Nonuse Existence/Bequest WTP Boatable to Fishable WQ 102 151 76 115 Total 1,580 2,025 371 1,063
0 0 7 2 8 0 12 13
56
15
76
8
130
46
0 2 4 16 16 17 17 24 27
68 74
115
188203
334
050
100150200250300350400
($ m
illio
n/yr
)
Annual Benefits of Improved Water Qualityin the Delaware River
Lower BoundUpper Bound
Viewing, Boating, Fishing, $68M, 6%
Boating, $334M, 30%
Recreational Fishing, $202M,
18%
Shad fishing,
$3.9M, 0%
Bird/Wildlife Watching, $33M, 3%
Waterfowl Hunting,
$1.6M, 0%
Swimming, 0, 0%Beach Going, $16M,
2%
Commercial Fishing, $17M, 2%
Agriculture, $188M, 17%
Navigation, $16M, 2%
Property Value, $27M, 2%
Municipal Water Supply, $24M, 2%
Industrial Water Supply, $17M, 2%
Nonuse Benefits,
$115M, 10%
Annual Benefits of Improved Water Qualityin the Delaware River
0
200
400
600
800
1,000
1,200
3.0 3.5 4.0 4.5 5.0 5.5
Mar
gina
l Ben
efits
($ m
illio
n)
DO (mg/l)
Marginal Benefits of Improved Water Qualityin the Delaware River
Recreation (high) Commercial Fishing (high) Agriculture (high) Navigation (high)Property Value (high) Water Supply (high) Nonuse (high)
0
200
400
600
800
1,000
1,200
3.0 3.5 4.0 4.5 5.0 5.5 6.0
$ m
illio
n/y
r
DO (mg/l)
Optimal Water Qualityin the Delaware River
Marginal Cost (Low) Median 32% N Reduction Marginal Cost (High) 75th Percentile
Marginal Benefits (Low) Marginal Benefits (High)
MB (High)
MB (Low)
MC (High)
MC (Low)
DRBC, $6PDE, $2 USDA NRCS, $33
USDA FSA, $2U.S. Forest Service, $6
NOAA, $51 Corps of Engineers, $22
FERC, $28
EPA, $97
Coast Guard, $1
FEMA, $9
USGS, $6USFWS, $21
National Park Service, $10DNREC, $63
NJDEP, $152
NYSDEC, $9
PADEP, $20
PADCNR, $11PFBC, $8
Phila. Water Dept., $81
New York City DEP, $102
Funding ($ million) in the Delaware Basin (FY12) DRBC
PDE
USDA NRCS
USDA FSA
U.S. Forest Service
NOAA
Corps of Engineers
FERC
EPA
Coast Guard
FEMA
USGS
USFWS
National Park Service
DNREC
NJDEP
NYSDEC
PADEP
PADCNR
PFBC
Phila. Water Dept.
New York City DEP
0
50
100
150
200
250
1985 1990 1995 2000 2005 2010 2015
$ m
illio
n
EPA Section 319 Clean Water ActFederal Appropriations
0.74
10 10
50 50
0
10
20
30
40
50
60
Delaware Estuary Lake Champlain Long Island Sound San Francisco Bay Chesapeake Bay Puget Sound
Appr
opria
tion
($ m
illio
n)
Congressional Interstate Basin Appropriations (FY 2011)
France: Agencies de L’eau collect user charges (redevance) from dischargers. Water parliaments advise on water use fees.
Germany: Ruhr Water Associations
(Genossenschaften) financed by user charges.
Mexico: National Water Commission oversees 25 river basin councils and 6 basin commissions funded by user fees.
Portugal: 15 river basin authorities funded by user
(withdrawal) and polluter (discharger) pays principles.
Australia: In 1985, Murray Darling Basin Ministerial Council organized. Funded by user/discharge fees and water trade market.
Beneficiary Pays Approach
WatershedConservation
$1.5 B
Forest Buffers$3.10/lb N
Wetlands$0.47/1000 gal
Water Filtration Plant$10 B Wastewater
Treatment$8.56/lb N
Conventional WWTP$3.24/1000 gal
0
2
4
6
8
10
12
New York City Chesapeake Bay N Reduction Wastewater Treatment
Savings from Payment for Environmental Services
1,660
291416
905
47
449
45130 141 132
0
500
1,000
1,500
2,000
Del. Basin Atmospheric Wastewater Urban/Suburban Agriculture
Cost
($
mill
ion/
yr)
Costs to Reduce N Loads by 32%Delaware Basin
W/O WQ Trading With WQ Trading
0
25
50
75
100
125
$ m
illio
n/yr
Funding Options to Improve Water Qualityin the Delaware Basin
AtmosphericDeposition
WastewaterTreatment
AgriculturalConservation
Urban-Suburban
$2.8B
$4.8B
$403M
$917M
Annual Economic ValueDelaware River Basin
$4.2 billion
$2.8 billion
$0.9 billion
$0.4 billion
0
1
2
3
4
5
Marcellus ShaleGas
Recreation/WaterQuality
Drinking WaterSupply
Forests
$ b
illi
on
/yea
r
Questions?