15 th Stockholm Water Symposium ~ Workshop 8 ~ The Cost of Non-Action in Controlling Toxic Water Pollution: An Economic Perspective by K. William Easter Professor of Applied Economics University of Minnesota

2 A.Objectives 1.Determine best methods for estimating cost 2.Discuss how information and behavior affects choice 3.Indicate what existing data shows concerning costs 4.Suggest strategies for reducing costs

3 B.Three toxic contaminates 1.Arsenic – widespread in Bangladesh, China and NE India 2.Atrazine – heavily used in U. S. Midwestern agriculture 3.Mercury – emission from coal-fired plants and mining C.Two country settings 1.Developed country – i.e., U.S. and Japan 2.Developing country – i.e., Bangladesh and India

5 D.Effects of three pollutants 1.Arsenic (inorganic) – acute/immediate and chronic health risks and death at high doses 2.Mercury (methylmercury) accumulates in fish and those who eat fish. Causes cancer, heart attacks, permanent brain damage, etc. 3.Atrazine – was classified as possible human carcinogen but is now listed as not a likely carcinogen by USEPA

6 E.Methods for estimating cost 1.Avoidance cost – need information and options 2.Recreational choice – for nondomestic uses 3.Cost-of-illness or value of statistical life – when health is impaired 4.Contingent valuation (survey) – to measure cost of discomfort and suffering of illness

7 F.What do past estimate show? (tables 1-3) 1.Avoidance cost for toxics $200 to $1,000 annually 2.Avoidance costs for nontoxics - $50 to $1,300 annually G.Developing country cost estimation (table 4) 1.Limited information and options 2.Recreation low priority H.Developed country cost estimation (table 5) 1.Have information and options 2.Recreation important

8 Table 1. Economic Cost of Drinking Water Quality Contamination Study Area Estimate Ranges Avoidance Cost (per month) Contingent Valuation (per month) Cost of Illness (per case) Georgia, U.S. (2000)$4-- West Virginia, U.S. (1993)$27 & 30-- Milesburg, Pennsylvania, U.S. (1993) $ Grande Vitoria, Brazil (2000) -$3-39- Kathmandu, Nepal (2005)$3$17$ Pennsylvania, U.S. (1989)$ $858-1,255

9 Table 2. Economic Cost of Toxic Pollution of Drinking Water Supplies Per Household Study Area Estimate Ranges Avoidance Cost (per month) Contingent Valuation (per season) Perkasie, Pennsylvania, U.S. (1992) $17 West Virginia, U.S. (1993)$91 Seoul, South Korea (1997)$3

10 Table 3. Economic Costs of Toxic Pollution of Water Used for Recreation Study Area Estimate Ranges Recreational Choice (per user per season) Cost of Illness (per case) California, U.S. (coastal area) (2005) $37-77 New York, U.S. (lakes) (1997) $63 Wisconsin, U.S. (Great Lakes) (2000) $89-108

11 Table 4. Best Method for Estimating Welfare Costs for a Developing Country with an Uninformed Population PollutantBest Measure of Cost of Non-Action ArsenicCost of illness and continent valuation MercuryCost of illness and contingent valuation AtrazineContingent valuation to estimate avoidance costs

12 Table 5. Best Method for Estimating Welfare Costs for a Developed Country with an Informed Population PollutantBest Measure of Cost of Non-Action ArsenicAvoidance cost MercuryAll four methods AtrazineAvoidance cost plus recreational choice

13 I.Future costs (table 6) 1.Arsenic serious future costs for Asia a.Bangladesh 60% of population affected 2.Mercury serious future costs for world a.Increased emission of coal fired plants: 1,500 tons annually with 870 tons from Asia b.High fish consumption – Asia and Pacific c.Weakening the U.S. mercury emission regulations impose a $190 million cost on Minnesota d.Japanese deaths from mercury just the beginning for Asia? 3.Atrazine’s full impact still uncertain

14 Table 6. Future Cost of Not Controlling or Mitigating Toxic Pollution PollutantDeveloping CountryDeveloped Country Arsenic LargeSmall MercuryVery largeLarge Atrazine Uncertain but growing Insignificant to moderate

15 J.Strategies for controlling the pollutants 1.Improve monitoring and detection efforts 2.Develop improved filters for arsenic 3.Strengthen and enforce mercury pollution emission standards 4.Develop improved substitutes for Atrazine.

16 Web page to access this paper.

17 St. Croix River in Interstate State Park, MN Photographer: Robert Ashley Wilson, 1983

18 Lake Kabetogama, Voyageurs National Park, MN. White pine. Photographer: Donald L. Breneman, 1995

19 Lake Superior, North Shore, MN, Split Rock Lighthouse Photographer: Donald L. Breneman,1995

20 Lake Superior, North Shore, MN, Middle Falls, Pigeon River Photographer: Robert Ashley Wilson, 1982