Tools estimates economic value of improving urban streams’ water quality

May 5, 2023
In a proof-of-concept demonstration, researchers found that residents of one area would pay an average of $127 per household per year for water quality improvements from tree cover and runoff management.

A team of researchers has developed a suite of tools to estimate the total economic value of improving water quality in some urban streams, according to a press release from North Carolina State University.

The work can assist federal and state agencies charged with developing environmental regulations affecting urban ecosystems across the Piedmont Region of the United States, which stretches from Maryland to Alabama.

“Urban streams are ubiquitous and face a number of stressors from rapid economic development,” says Roger von Haefen, professor of agricultural and resource economics at North Carolina State University and corresponding author of a paper on the work. “But there have not been well-established tools to help agencies assess the benefits of regulations aimed at improving the water quality of these streams. Our work here provides a robust set of tools that allow us to assess both use and non-use benefits associated with improved water quality in urban streams.”

Use benefits arise from how people directly interact with urban streams. For example, attractive streams can increase property values of nearby homes, whereas polluted streams may diminish property values. Non-use benefits capture existence and bequest values, or what people are willing to pay to protect natural resources in their natural state for the benefit of future generations.

To capture the broad range of potential benefits, the researchers developed an ecological production function framework that translates observable, biophysical measures of water quality into ecological outcomes that people perceive and value. For example, a biotic index is a scale that uses the diversity of species in a waterbody to assess a stream’s overall ecosystem health, which is an ecological output that the public values.

Specifically, the framework draws on existing water quality monitoring data and uses computational modeling to predict water quality changes related to various regulatory interventions. The framework then leverages expert assessments of how these water quality changes translate into ecological endpoints the public values. A stated preference survey of area residents is then used to quantify the public’s willingness to pay for these outcomes – and, by extension, for improvements in stream water quality.

The researchers demonstrated the utility of the new benefit estimation tools by looking at the Upper Neuse River Basin in Durham and Wake counties, North Carolina.

In this proof-of-concept demonstration, the researchers found that residents of the area containing the Upper Neuse River Basin would be willing to pay an average of $127 per household per year – approximately $54 million in total – for water quality improvements derived from increasing tree cover along stream banks by 25% and decreasing runoff from impervious surfaces, such as streets and parking lots.

“We’ve shown that this approach can work, and it is designed for use in urban areas throughout the Piedmont region,” von Haefen says. “Currently, EPA has limited tools to assess the benefits associated with environmental regulations that affect urban streams. We’re optimistic that federal and state agencies can use this framework to better capture those benefits and make more informed regulatory decisions.”

The paper, “Estimating the Benefits of Stream Water Quality Improvements in Urbanizing Watersheds: An Ecological Production Function Approach,” was published on April 24 in the Proceedings of the National Academy of Sciences (PNAS).