1. 10 th Joint Conference on Food, Agriculture and the Environment What Are the Economic Health Costs of Non-Action in Controlling Toxic Water Pollution? by K. William Easter and Yoshifumi Konishi Department of Applied Economics University of Minnesota Meri Raggi Department of Statistics University of Bologna Davide Viaggi Department of Agricultural Economics and Engineering University of Bologna

2. 2 A.Problem 1.Many new toxic chemicals being produced.  20,000 in last 30 years 2.Limit public information available on possible health effects of new “toxic chemicals.”  EPA has only received health data on 15% 3.Little attention given to estimating costs of toxic chemical contamination in water bodies. 4.These cost estimates are likely to be dependent on:  Composition of water demand  Information given the public  Action of private and public agents

3. 3 B.Outline of paper 1.Review methods for estimating cost 2.Review of past estimates of water pollution costs 3.Six different “scenarios” with different chemicals and countries to illustrate choices 4.How information, behavior and options affect choice of methods 5.Where future pollution costs are likely to be high 6. Suggested strategies for reducing costs of contamination

4. 4 C.Methods for estimating cost 1.Avoidance cost – need information and options 2.Recreational choice – for nondomestic water uses 3.Cost-of-illness or value of statistical life – when health is impaired

5. 5 Table 1. 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

6. 6 Table 2. 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

7. 7 Table 3. Economic Cost of Microbial or Mineral Contamination of Drinking Water 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) $13-33-- Grande Vitoria, Brazil (2000) -$3-39- Kathmandu, Nepal (2005)$3$17- Pennsylvania, U.S. (1989)$34-108-$858-1,255

8. 8 Table 4. Estimated Costs of Toxic Water Contamination in Europe Estimated Range of Costs ----------------------------------------------------------------------------------------------------- AvoidanceContingent RecreationalCosts of Cost Per ValuationChoiceIllness Study Area MonthPer MonthPer YearPer Case ----------------------------------------------------------------------------------------------------- -- U.S. Dollars -- ----------------------------------------------------------------------------------------------------------------------------------------------------------- Porretta, Bologna, IT 1 19926 Palmanova, Udine, IT 2, 20003 Trentino, IT 3, 19965 Venice, IT 4, 2002 (TC fishing)31.50 UK 5, 19912 England & Wales, UK 6 85,552 - 221,802 (per km of cost per year) Birmingham, UK 7, 19990.01 – 0.06 Brest, FR 8, 19932 – 3 Alsatian region, F 9, 19939 Denmark 10, 200?9 – 19 --------------------------- Sources: 1 Stampini (1998); 2 Marangon & Tempesta (2004); 3 Notaro (2001); 4 Alberini et al. (2006); 5 Hanley (1991); 6 Willis & Garrod (1996); 7 Georgiou et al. (2000); 8 Le Goffe (1995); 9 Stenger & Willinger (1998); 10 Hasler & Lundhede (2005);

9. 9 Table 4. Estimated Costs of Toxic Water Contamination in Europe-- Continued Estimated Range of Costs ----------------------------------------------------------------------------------------------------- AvoidanceContingent RecreationalCosts of Cost Per ValuationChoiceIllness Study Area MonthPer MonthPer YearPer Case ---------------------------------------------------------------------------------------- -- U.S. Dollars -- ------------------------------------------------------------------------------------------------------------------------------------------------------------ Netherlands, NL 11, 20022 – 6 Austria 12, 200? 60 (per ton COD) Spain 13, 1997-2002 109 – 661 (000 $ per ton) Estoril Coast, P 14, 1997 44 ($ per person) Estoril Coast, P 14, 1997 8 – 11 ($ per visit to beach) Baltic Sea region, PL 15, 199484 ($ per person) --------------------------- Sources: 11 Brouwer (2006); 12 Angst et al. (2001); 13 Sanchez-Choliz & Duarte (2005); 14 Machado & Mourato (2002); 15 Zylicz et al. (1995).

10. 10 D.U.S. and EU Cost Estimates  Few evaluation studies in either the U.S. or EU  Even fewer cases evaluate a single toxic pollutant  Varied methodologies used but CV prevailed in the EU studies  Only in U.S. were there studies estimating the cost of illness

11. 11 E.Two country settings 1.Developed country – i.e., U.S., Western Europe & Japan 2.Developing country – i.e., China, Bangladesh and India F.Three toxic contaminates 1.Arsenic – naturally occurring in groundwater 2.Mercury – emission from coal-fired plants and mining 3.Atrazine – heavily used herbicide in U.S. Midwestern agriculture

13. 13 G.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 (human health impacts uncertain)

14. 14 H.Developing country cost estimation 1.Information and options limited  Do governments test water and report contamination?  Can low income user afford options?  65% of those informed about arsenic pollution changed wells in one area in Bangladesh 2.Recreation low priority in many low income countries  Attitudes are changing slowly regarding the value of recreation

15. 15 I.Developed country cost estimation 1.Have information and options  Do public agencies report contamination?  What options are actually available? 2.Recreation is important with higher incomes 3.EU’s water framework directive will likely require local estimates of costs

16. 16 Table 5. Best Method for Estimating Welfare Costs of Non-Action PollutantDeveloping CountryDeveloped Country ArsenicCost of illnessAvoidance cost MercuryCost of illnessAll three methods AtrazineCV to estimate costs Avoidance cost & recreational choice

17. 17 J.Future costs 1. Arsenic serious future costs for Asia a.Bangladesh 60% of population may be affected because of high use of groundwater b.Problem in NE India and China c.In some cases, the arsenic in wells is 20 times the WHO standard

18. 18 J.Future costs, continued - - 2. Mercury serious future costs for world a.Increased emission of mercury from coal-fired plants: 1,500 tons of mercury emitted annually with 870 tons from Asian plants b.High fish consumption – Asia and Pacific c.Are Japanese deaths from mercury just the beginning for Asia? 3. Atrazine’s full impact still uncertain

19. 19 Table 6. Potential Future Cost of Not Controlling or Mitigating Toxic Pollution PollutantDeveloping CountryDeveloped Country Arsenic LargeSmall MercuryVery largeLarge Atrazine Uncertain but growing Insignificant to moderate

20. 20 K.Strategies for controlling the pollutants 1.Improve monitoring and detection efforts particularly for mercury and arsenic 2.Provide consumers better information regarding water quality and options for cleaner water 3.Develop improved filters for arsenic 4.Strengthen and enforce mercury pollution emission standards 5.Develop improved substitutes for Atrazine.