Water Quality Program - Water Policy & Economics

In agriculture, environmental regulations have usually been voluntary. New regulations, however, such as Total Maximum Daily Loads (TMDLs) for pollutants, and more stringent stormwater permits, often seek mandatory pollution control from agriculture and other non-point sources. Economic analysis of water quality regulation focuses on either cost-benefit or cost-effectiveness. Cost-effectiveness studies seek to determine how to meet clean water goals by concentrating on least cost sources of pollution reduction. In particular, there is some evidence that further reduction in water pollution is cheaper to obtain from non-point sources such as agriculture than from already heavily regulated point sources. Cost-benefit studies attempt to measure whether the value of water quality benefits exceeds the costs of implementing pollution-reduction measures. Benefits can be direct, such as fewer water-related illnesses, or indirect such as improved habitat for fish and wildlife. Economists place a dollar value on these benefits by estimating consumers' willingness to pay (WTP). Often, economists lack location-specific information necessary to properly value the benefits of improved water quality.

Some resources for more information include the Resources for the Future (RFF) website general water page, and their page for Valuation of Environmental Benefits.

Cost and Return Studies of crops from alfalfa to watermelon are available from the UC Davis Department of Agricultural and Resource Economics (ARE), and are searchable by crop or county/region.

Other resouces that may be of interest include articles from the UC Davis ARE Update newsletter, such as:

• "Agricultural Water Demands and the Gains from Precision Irrigation Technology" pdf (3pp) (from ARE Update, Vol.7, No.5, May/June 2004)
  
• "Making Room for the Environment in California Water Policy: Ten Years of the Central Valley Project Improvement Act" pdf (3pp) (from ARE Update, Vol.7, No.2, Nov/Dec 2003)
  
• "Do Farms Provide More than Food? Public Perspectives in California." pdf (3pp) (from ARE Update, Vol.6, No.5, May/June 2003)
  
• "Clean Water in California: What is it Worth?" pdf (4 pp) (from ARE Update, Vol. 4, No. 4, Summer 2001)
• "Flowing Toward Markets: California Water in 2000." pdf (pages 2-4 of 12) (from ARE Update, Vol.2, No.1, Fall 1998)