Economic models for TMDL assessment and implementation

The TMDL assessment and implementation process is designed to achieve designated uses for water bodies, which are set by states based on criteria including perceived costs and benefits. Setting water quality goals based on designated uses and plans to achieve these goals have important implications for public welfare. Both treatment and damage costs should be considered in simultaneously determining the desired water quality goal and allocating pollution reductions among sources to achieve that goal. Assessing and implementing TMDL plans are complicated by uncertainties about pollution damages and stakeholder responses. Economic optimization or simulation models linked to water quality models allow water quality impacts and costs of TMDL standards to be assessed Higher water quality thresholds may be reserved for watersheds with higher estimated benefits. Costs of achieving standards can be reduced by targeting reductions at pollution sources with the lowest costs of achieving reductions. Trading programs can help achieve efficient targeting of pollution reductions while distributing costs equitably. The effectiveness of economic models to assist in setting water quality goals and in TMDL program planning and implementation can be improved by using economic models to analyze costs and benefits of water quality improvements and to assist with pollution targeting and trading programs to minimize costs of reducing pollution. Multi-media impacts of pollution should be included within economic and environmental water quality models. Given uncertainties about benefits and costs of achieving TMDL standards, policymakers and program managers need to collect more data on stakeholder responses to TMDL programs as well as better monitoring data on pollutant levels and functioning of aquatic systems.