Research Accomplishment Reports 2011

Benefits and Costs of Natural Resources Policies Affecting Public and Private Lands (from W1133)

J.K. Schieffer
Department of Agricultural Economics

 

Non-Technical Summary

Natural resource agencies and institutions at the federal, state, and local levels, as well as private landowners, attempt to balance economic growth and environmental quality. Emphasis on environmental quality is evident in provisions of the most recent Farm Bills; in agricultural land preservation programs at the local, state and federal levels; and in legislative mandates to federal agencies to justify their decisions regarding how natural resources are to be managed, including protecting environmental quality, providing wildlife habitat, and providing access for recreation. In federal regulatory impact analyses, agencies use a benefit-cost analysis framework, which requires quantification of the monetary value of all natural resources, including those not traded in markets and thus lacking market prices. The need for valid and reliable economic estimates of non-market resources continues to grow as management philosophies and people's demands for environmental quality change. For example, federal land management agencies have adopted ecosystem management as a guiding principle, which requires information on environmental, social, and economic aspects of the quality of, and / or project impacts on, natural resources. The objectives of this regional research project are designed to provide non-market benefit and cost information needed by decision makers in the public and private sectors. The rechartered project will address important stakeholder issues such as recreation access to public and private lands; the valuation of ecosystem services; and effective management of natural hazards such as invasive species and forest fires.

2011 Project Description

Under the umbrella of this multistate project, I am conducting research about water policy in Kentucky, including the feasibility of a tradable permit program allowing agricultural producers to participate via offset credits for implementing quality-improving best management practices. Several outputs from this project were created during 2011.

I used surveys to collect data from both nonpoint sources (agricultural producers) and point sources (municipal water treatment plants) regarding the costs to both types of sources for abating water pollution and to agricultural producers' willingness to participate in various forms of tradable permit programs.

Members of my project group made several presentations of preliminary findings at the annual symposium sponsored by the Kentucky Water Resources Research Institute. We also presented our research at the annual conference of the Agricultural and Applied Economics Association, as well as participating in other sessions related to water policy. Using material from this project, I have co-authored two working papers (one currently under review at a journal) and a book chapter intended for publication in 2012 and 2013. An article describing the project appeared in The Ag Magazine, a general-audience publication targeting stakeholders in the University of Kentucky's College of Agriculture.

2011 Impact

During the course of the project, I, my collaborators, students, and audience members have improved our knowledge of water quality issues in Kentucky. Specific topics of that knowledge include the regulatory framework established by the Clean Water Act, the economics of tradable permit systems (both in general and as applied to water quality protection), agricultural conservation programs, and the nature of runoff pollution from nonpoint sources.

We have thoroughly reviewed the scholarly literature concerning water policy, tradable permit programs, and agricultural participation in voluntary programs. I and the other members of the project have also developed our skill sets for economic and policy analysis. We gained familiarity with databases including the EPA's EnviroFacts and NPDES permit databases, the USGS's National Land Cover Database, and the USDA's Web Soil Survey.

We have developed new proficiencies with spatial mapping software (ARCGIS) and spatial econometric analysis, as well as honing existing skills with database management, statistical analysis, and survey design. As we continue to disseminate the results of our research to policymakers and other stakeholders, we expect that it will lead to better policy decisions and improvements in the quality of water resources in Kentucky.