Abstract The objective of this study is to identify the optimal spatial distribution of Best Management Practices (BMPs) to reduce total phosphorus (TP) runoff from agricultural land in the largest Canadian watershed draining into Lake Erie, the Great Lake most vulnerable to eutrophication. BMP measures include reduced fertilizer application, cover crops, buffer strips, and the restoration of wetlands. Environmental SWAT model results feed into a spatial optimization procedure using two separate objective functions to distinguish between public BMP program implementation costs (PIC) on the one hand and farmers’ private pollution abatement costs (PAC) on the other hand. The latter account for the opportunity costs of land retirement and changing land productivity. PAC are initially lower than PIC but exceed the latter after 30% of the annual TP baseline load is eliminated. This suggests that under optimal conditions existing grant and incentive payments cover the economic costs farmers face up to a maximum of 30% of the baseline load reduction. Imposing further reductions of up to 40% results in a cost to farmers of almost $52 million per year. This is 45% higher than the optimal solution based on PIC and therefore not deemed incentive‐compatible under the watershed's existing cost‐sharing scheme.

The Great Lakes (GL) in North America are among the largest freshwater resources on the planet facing serious eutrophication problems as a result of excessive nutrient loadings due to population and economic growth. More than a third of Canada's GDP is generated in and around the GL. Hence, the economic interests affected by pollution and pollution control are high. New policies to reduce pollution are often insufficiently informed due to the lack of integrated models and methods that provide decision-makers insight into the direct and indirect economic impacts of their policies. This study fills this knowledge gap and estimates the impacts of different total phosphorus (TP) restriction policy scenarios across the GL. A first of its kind multi-regional hydro-economic model is built for the Canadian GL, extended to include TP emissions from point and non-point sources. This optimization model is furthermore extended with a pollution abatement cost function that allows sectors to also take technical measures to meet the imposed pollution reduction targets. The latter is a promising new avenue for extending existing hydro-economic input-output modeling frameworks. The results show decision-makers the least cost-way to achieve different TP emission reduction targets. The estimated cost to reduce TP emissions by 40% in all GL amounts to a total annual cost of 3 billion Canadian dollars or 0.15% of Canada's GDP. The cost structure changes substantially as policy targets become more stringent, increasing the share of indirect costs and affecting not only the economic activities around the GL, but the economy of Canada as a whole due to the tightly interwoven economic structure.

The main objective of this study is to assess the economic value of the Brazilian Amazon’s ecosystem services accruing to Brazilians based on a meta-analysis of the Brazilian valuation literature. Insight in these local values provides an important benchmark to demonstrate the importance of preserving the Brazilian Amazon forest. The review covers almost 30 years of Brazilian valuation research on the Amazon, published predominantly in Portuguese, highlighting a high degree of study and data heterogeneity. The estimated mean value of the provision of habitat for species, carbon sequestration, water regulation, recreation and ecotourism to local populations is about 410 USD/ha/year. The standard deviation is however high, reflecting a wide dispersion in the distribution of values. Between 50 and 70 percent of the variation in these values can be explained with the help of the estimated meta-regression models, resulting in considerable prediction errors when applying a within-sample resampling procedure. These findings demonstrate the need for a more robust, common ecosystem services accounting and valuation framework before these values can be scaled up and aggregated across the entire Brazilian Amazon.

Three decades of non-market water quality valuation (NMWQV) studies in Canada are analyzed to generate a generic benefits transfer function. Contrary to the large valuation literature focusing on water and wilderness-based recreation in Canada, the number of studies related to water quality is limited. NMWQV studies lack a common design, including consistent adherence to a Canada-specific water quality ladder (WQL). Despite the high degree of data heterogeneity, values extracted from the literature show an increasing step function when relating them to the Resources for the Future WQL. Meta-regression models (MRMs) explain a large share of the variation in value estimates based on the type of water resources, population and methodological characteristics. Baseline water quality and the size of the water quality change are significant determinants of the estimated non-market values. With a relative mean prediction error of no more than 20 percent, the predictive power of the estimated MRMs is high. As such, they are an important step forward in the development of a policy-relevant water quality valuation model. However, there is a clear need for the development of more coherent non-market valuation guidelines in the Canadian water context.

Three decades of non-market water quality valuation (NMWQV) studies in Canada are analyzed to generate a generic benefits transfer function. Contrary to the large valuation literature focusing on water and wilderness-based recreation in Canada, the number of studies related to water quality is limited. NMWQV studies lack a common design, including consistent adherence to a Canada-specific water quality ladder (WQL). Despite the high degree of data heterogeneity, values extracted from the literature show an increasing step function when relating them to the Resources for the Future WQL. Meta-regression models (MRMs) explain a large share of the variation in value estimates based on the type of water resources, population and methodological characteristics. Baseline water quality and the size of the water quality change are significant determinants of the estimated non-market values. With a relative mean prediction error of no more than 20 percent, the predictive power of the estimated MRMs is high. As such, they are an important step forward in the development of a policy-relevant water quality valuation model. However, there is a clear need for the development of more coherent non-market valuation guidelines in the Canadian water context.

Abstract Improving groundwater quality is expected to yield direct use benefits to society (e.g. clean and safe drinking water) and groundwater dependent ecosystems. Ten years after the adoption of the European Groundwater Directive (GWD), policymaker and public understanding of the societal value of groundwater protection is still rather limited. This is partly due to the invisible and intangible nature of groundwater resources and the sheer lack of valuation studies. This study contributes to the limited number of groundwater valuation studies in Europe by estimating the public benefits from improved groundwater quality in the Aveiro Quaternary Aquifer (AQA) in Portugal. This is the first and only economic valuation study of groundwater in Portugal. In order to communicate the various benefits provided by groundwater resources in easy understandable terms to lay people, and to assess public perception and willingness to pay (WTP) for groundwater protection, a groundwater quality ladder was developed based on the threshold values proposed in the GWD. The ladder reflects the different use and non-use values of groundwater quality improvements and accounts for natural background levels of chemicals in groundwater. The large-scale survey targets a representative sample of residents in the AQA. Split samples are used to assess the impact of framing groundwater protection in a broader regional water resources management context, giving part of the sample furthermore time to think about their WTP for the different groundwater threshold levels. Although use values dominate public WTP for the different groundwater threshold values, substantial non-use values are also found. Public WTP is considerable, varying between 20 and 30% over and above the current water bill residents pay for safe drinking water quality and natural background levels, respectively. Giving respondents time to think and framing groundwater protection as part of the improvement of all water resources in the region results in a more conservative WTP estimate. Public WTP is higher for better informed private well owners in rural areas. Aggregated across the entire aquifer the estimated total economic value is 1.5 million euros annually for safe drinking water quality and 3.5 million euros annually for groundwater containing natural background levels only.

Payments for Environmental Services (PES) constitute an innovative economic intervention to counteract the global loss of biodiversity and ecosystem functions. In theory, some appealing features should enable PES to perform well in achieving conservation and welfare goals. In practice, outcomes depend on the interplay between context, design and implementation. Inspecting a new global dataset, we find that some PES design principles pre-identified in the social-science literature as desirable, such as spatial targeting and payment differentiation, are only partially being applied in practice. More importantly, the PES-defining principle of conditionality—monitoring compliance and sanctioning detected non-compliance—is seldom being implemented. Administrative ease, multiple non-environmental side objectives and social equity concerns may jointly help explain the reluctance to adopt more sophisticated, theoretically informed practices. However, by taking simplifying shortcuts in design and implementation, PES programmes may become less environmentally effective and efficient as economic incentives, thus underperforming their conservation potential.