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CONTROLLING EXCESS STORM WATER RUNOFF WITH TRADABLE CREDITS
Citation:
Thurston**, H, H C. Goddard, D C. Szlag*, AND B Lemberg**. CONTROLLING EXCESS STORM WATER RUNOFF WITH TRADABLE CREDITS. Presented at Northeastern Agricultural and Resource Economics Asso, Bar Harbor, ME, 6/11-13/2001.
Description:
Development that increases the impervious surface in a watershed causes excess storm water runoff (SWR) that has been identified as a major contributor to stream and riparian habitat degradation. Reduction of storm water runoff can be achieved through establishment of a number of watershed-wide best management practices (BMPs). Among BMPs available to property owners are detention ponds, wet ponds, infiltration basins/trenches, porous pavement, and a variety of vegetative detainments. All of these detain water during a storm event for later gradual discharge. Most BMPs also carry out primary water treatment by permitting shilt and sediments to setle before entering streams. How many of these management practices are required depends upon the watershed's soil and land use characteristics, amount of impervious surface, and target level of SWR reduction. Following on the acceptance of tradable permits as a mechanism for reducing certain air pollutants, we propose the use of a system of tradable discharge credits (TDCs) to promote the establishment of a network of distributed BMPs for reducing SWR. Assuming that the efficiency and cost of BMPs vary across the watershed, and taht marginal abatement costs are increasing, we show that TDCs provide incentive to build and maintain BMPs where they are most efficient, thereby providing SWR control at a cost lower than large-scale engineering alternatives. Using individual property level data for the Shepherd Creek (specific attributes including soil type, land use, slope and impervious surface proportion, and BMP cost), we couple economic analyhsis with the ArcView geographic information system (GIS) to develop various scenarios for growth and compare impacts on streamflow. Property owners' cost minimizing decisions are modeled under ecologically determined constraints on streamflow, allowing estimation of equilibrium credit price. Total costs incurred under a credit-trading paradigm are compared to those of alternative SWR reduction strategies. The ArcView format facilitates analysis of the spatial data, and allows for potentially insightful display of results.