Benefit/cost analysis of nonpoint source control in the tillamook bay, oregon watershed

Abstract

Economics has come to play an increasingly important role in decisions concerning lake protection and restoration. This study of the tillamook Bay, Oregon, nonpoint source control efforts illustrates a methodology by which a benefit/cost analysis can be accomplished for evaluating cost-effectiveness of such projects. Tillamook Bay has been periodically closed to shellfishing for several years because of bacterial contamination. Implementation of agricultural best management practice on about 60 percent of the identified critical sources in the watershed has produced a statistically significant reduction in bay fecal coliform concentrations. With plans for nearly 100 percent implementation by 1989, the bay waters should again meet shellfish water quality standards thereby removing the threat of further closures. Total government costs for the cleanup effort will probably be in the range of six million dollars. This paper develops a benefit/cost analysis to determine the cost effectiveness of this nonpoint source control effort. The analysis shows that the control effort is only marginally economically efficient when only lost commercial shellfishing revenues are considered. However, when the lost revenues from associated recreational activities are considered, the analysis shows that benefits of greatly exceed project costs. © 1987 Taylor & Francis Group, LLC.