IEc Nitrogen Loading and Water Quality on Cape Cod: Modeling the Costs of Inaction Presentation by Industrial Economics, Incorporated February 6, 2013 INDUS TRIAL ECONOMICS , INCORPORATED INDUS TRIAL ECONOMICS , INCORPORATED
Systems Thinking as a Sustainability Tool Sustainable Development Economic Environmental Community Prosperity Protection Well ‐ Being INDUS TRIAL ECONOMICS , INCORPORATED
“Triple Value” Framework Economy Society economic value recreation, cultural values, quality of tourism, fishing, land runoff and life values, and wastewater aquaculture Environment ecological resource base INDUS TRIAL ECONOMICS , INCORPORATED
Introduction to 3VS Modeling • Systems dynamics models evaluate the implications of large ‐ scale environmental changes, making explicit interactions between the environment, communities , and the economy . • Users can define scenarios in the model, selecting different combinations of policy alternatives (including No Action). • The 3VS model will simulate the scenario and project results 30 years into the future. INDUS TRIAL ECONOMICS , INCORPORATED
Generalized Framework of 3VS model Economy Society Population Economic growth growth (employment Citizen and income) Wastewater prosperity and impervious Fishing & Energy, water, surface flows Aesthetic tourism & waste flows Quality of Landscape Nutrient loadings to embayments Legend Water quality & coastal Climate ecosystem health S ustainability change Indicators Environment INDUS TRIAL ECONOMICS , INCORPORATED
Cape Cod Model –Nitrogen Loading Primary Secondary N Load at N Load at Source Transport Drivers Drivers Embayments S eptic Dwelling Population Wastewater Units Load Groundwater S ewered Transport: Wastewater load Wastewater Non- Attenuation and secondary Load Attenuation and Residential and Delay driver data come delay factors are Floor Area from CCC’s Residential derived from data Watershed MVP Fertilizer Load from CCC’s Model Economic Residential Watershed MVP Development Lawns Model Impervious S urface Water Total S urface Transport: Nitrogen Impervious cover Runoff Load Attenuation Load data come from MassGIS Natural Precipitation S urface Runoff Load Impervious Cover Other Load (Landfills, Golf Courses, Etc.) Atmospheric Freshwater Deposition Bodies Load Atmospheric deposition Direct Deposition estimates come from Load EPA’s CMAQ model INDUS TRIAL ECONOMICS , INCORPORATED 6
Cape Cod Model – Economic Indicators of Concern Stakeholder outreach conducted by Adem Delibas (M.I.T.) identified key concerns with respect to increased nitrogen loading across the Cape: Property Values (Primary Concern) Tourism spending Household income Employment Natural resource revenue INDUS TRIAL ECONOMICS , INCORPORATED
Cape Cod Model – Economic Indicators Environmental Environmental Ecological Economic Effect Multiplier Effects S tressor Change Change (Welfare Impact) (Regional Impact) Relates nitrogen loadings to Changes in regional Commercial finfishing and commercial fish landings economic shellfishing (landings, (Breitburg, et al. 2009) output/ value-added harvest values by area) S hellfish Populations S hellfish Aquaculture (production values by area) Estimated 3% increase in Recreational fishing and residential property value Changes in regional shellfishing (number and per 1 meter increase in Nitrogen spending (tourism) locations of trips or Secchi Depth (average loadings permits) Nitrogen relationship from three Concentration published studies) Property Changes in property values tax income Chlorophyll A Beach visits Estimated 0.56% (trip numbers Changes in regional decrease in beach visits and locations) spending (tourism) for 1% decrease in Turbidity/ Secchi Depth Clarity Recreational (Diamantides, 2000) Boating Change in Change in quality/ quantity of employment and people’ s value-added experience INDUS TRIAL ECONOMICS , INCORPORATED 8
Watersheds Flowing into Embayments S ource: Cape Cod Commission 208 Planning Presentation INDUS TRIAL ECONOMICS , INCORPORATED
Watersheds Containing Embayments • Of the 57 watersheds that flow into embayments, 23 contain embayments and were the subject of MEP reports, allowing us to project effects of N loading on water quality indicators. • 3VS model quantifies and reports effects of N loading by watershed. • Model focuses on marine systems and not freshwater systems, which may also be impaired by N loading. INDUS TRIAL ECONOMICS , INCORPORATED
Effects of No Action – Map of Forecast Change in N Loading INDUS TRIAL ECONOMICS , INCORPORATED
Effects of No Action – Potentially Affected Properties LEWIS BAY Total Value of Waterfront Residences $270 mill Total Value of Near Waterfront $650 mill Residences Total Value of Affected Properties $920 mill INDUS TRIAL ECONOMICS , INCORPORATED
Effects of No Action – Nitrogen and Property Value Effects • As N loading is projected to increase in multiple embayments, including Lewis Bay, property value reductions are expected. • With baseline property values for waterfront and near waterfront residences in our example watershed totaling approximately $920 million, even small percentage changes (e.g., 0.5 percent effect on value over 30 years) generate an embayment ‐ level effect on the order of millions of dollars . • Furthermore, the reduction in property values likewise reduces the property tax base for the municipality. For Lewis Bay, property value reductions in the millions means tens of thousands less in annual property tax revenue . • Calculating these impacts Cape ‐ wide, N loadings increasing under the No Action scenario can measurably effect indicators of community well ‐ being. INDUS TRIAL ECONOMICS , INCORPORATED
Effects of No Action – Potentially Affected Beaches PLEASANT BAY INDUS TRIAL ECONOMICS , INCORPORATED
Effects of No Action – Nitrogen and Beach Visits Effects • Approximate 16% reduction in annual Pleasant Bay: Summer Beach Trips summer beach trips 18,500 (May ‐ Sept) at Pleasant 18,000 Bay beaches over 30 years. 17,500 • Associated reduction in 17,000 regional beach recreation ‐ related 16,500 spending (food, gas, 16,000 lodging, entertainment). 15,500 • Multiplier effects on 15,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 regional employment opportunities and economic output. INDUS TRIAL ECONOMICS , INCORPORATED
Benefits of Taking Action • Taking action to reduce N loading can improve water quality Action Effect of Nitrogen Loading on Value of Indicator above and beyond baseline levels. • In addition to improving the ecological, social, and Baseline Value economic indicators directly affected by water quality improvements, No Action innovative interventions to Time control N can generate co ‐ benefits. INDUS TRIAL ECONOMICS , INCORPORATED
Next Steps– Complete Phase I Phase I of the modeling effort involves evaluating the ecological and economic implications of the “No Action” scenario: • Increase geographic scope of model by integrating additional watersheds, as needed. • Integrate costs in no action scenario (e.g., for maintaining septic systems). • Incorporate additional categories of ecological and economic impacts (e.g., commercial and recreational finfishing and shellfishing, wildlife viewing, eelgrass communities, macroeconomic effects). INDUS TRIAL ECONOMICS , INCORPORATED
Next Steps– Phase II Phase II of the model development focuses on modeling the costs and benefits of interventions to mitigate nitrogen loading: • Scenario ‐ based approach. • Explores traditional and alternative interventions. • Considers co ‐ benefits of interventions (beyond reducing nitrogen loading ‐ e.g., increased open space, carbon sequestration). • Integrates intuitive user interface to allow stakeholders to run different scenarios by altering assumptions and parameters. INDUS TRIAL ECONOMICS , INCORPORATED
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