United States
             Environmental Protection
             Agency
Office of Water
(4301)
November 1995
EPA-820-F-95-004
&EPA      PROTECTING THE GREAT LAKES
             The Costs and Benefits of Reducing
             Toxic Pollution in Three Communities

-------

-------
 PROTECTING THE GREAT LAKES


THE COSTS AND  BENEFITS OF

 REDUCING TOXIC POLLUTION

 IN THREE  COMMUNITIES



CASE STUDIES SHOW BENEFITS OUTWEIGH COSTS

EPA recently issued common-sense guidelines to reduce toxic pollution in
the Great Lakes and ensure protection for the environment and people liv-
ing in the area. Will this protection come at a reasonable cost? Results
from a detailed evaluation of impacts for three communities in the region
reveal that public health and environmental benefits will outweigh the costs
of achieving those reductions.

The three communities evaluated were the Fox River near Green Bay,
Wisconsin; the Saginaw River near Bay City, Michigan; and the Black
River near Cleveland, Ohio. Information on the case study results is pro-
vided.

PROTECTING PUBLIC HEALTH

The Great Lakes are a priceless treasure, containing 95% of the fresh water
in the United States, and 20% of the fresh water in the world. Over 23 mil-
lion people depend on the Great Lakes for drinking water. Overall,  more
than 40 million people live in the surrounding basin, including nearly 20
percent of the U.S. population and 50 percent of the Canadian population.

PROTECTING THE ECONOMY

The Great Lakes are vitally important to the regional economy, and the
surrounding basin is a major industrial and agricultural center. It sus-
tains nearly 11% of the total employment and 15% of the manufactur-
ing employment for the entire United States and Canada. With more
than 94,000 square miles of navigable water, the Great Lakes support
a thriving and robust recreational industry. About one million boats
operate each year generating direct spending of more than $2 billion.
Surveys show that over 2.5 million anglers fished in the Great Lakes
in 1991, with total expenditures of $1.3 billion.

Fishing and boating can be very important revenue sources for local
communities. For example, Saginaw Bay provides 16 public access sites,
17 state, county, and local parks and campgrounds are located along the
shore.
    TOXIC POLLUTANTS —
   A LONG TERM HEALTH
         PROBLEM

Toxic pollutants  can be a
serious public health threat
because  they build up, or
bioaccumulate, in the bodies of
people and animals that eat
fish, increasing the risk of
cancer,  birth defects, kidney
disorders,  and reproduction
damages. Once in the environ-
ment they can remain there for
hundreds of years.

-------
  THE LOWER FOX RIVER AND
  C-REEN BAY CASE STUDY SITE

The Lower Fox River and Green
Bay are  in northeastern Wisconsin
an area, that is both heavily industri-
alized and highly agricultural.  Dairy
farming is prevalent in much of the
watershed,  while the river's  banks
hold the highest concentration of
pulp and paper mills in the world.
Over 40  industries and ten munici-
palities discharge wastewater into
the  Lower Fox River  drainage
basin.  Nineteen of these  facilities
are considered  major dischargers
(i.e., facilities  that discharge more
than one million gallons of waste-
water per day).
Toxic pollutants, particularly  PCBs,
have caused widespread effects in
the area. Fish consumption advi-
sories  are in  effect  for  many
species due to cancer risk. A con-
sumption advisory  is also  in effect
for  mallard ducks.  PCB-contami-
nated sediments are a major prob-
lem, with some levels  being high
enough  to  meet the definition of
hazardous waste under Superfund.
Despite these problems,  demand
for  recreational opportunities con-
tinues to be  high. Many people
engage  in  fishing,  boating, bird-
watching and  hunting.
PROTECTING THE ENVIRONMENT

The Great Lakes which form the north coast of the United States include
over 4,500 miles of coastline, six national parks and lakeshores, six
national forests, seven national wildlife refuges, and hundreds of State
parks, forests, and sanctuaries. These unique natural resources provide
renowned recreational opportunities, priceless aesthetic beauty, and
diverse ecological habitat. Hundreds of species of mammals, birds, fish,
reptiles, and amphibians and untold thousands of plant species are native
to the basin.

A LANDMARK CONSENSUS EFFORT
Over the past 30 years, concern has grown about the harmful effects of
toxic pollutants on human health and the environment in the Great Lakes
Region. Of special concern are bioaccumulative toxic pollutants. These
pollutants can be a serious threat because they build up in the bodies of
people and animals that eat fish, increasing the risk of cancer, birth
defects, kidney disorders, and reproductive
damages. Once these pollutants are
in the Great Lakes they can
remain there for hundreds of
years. Thus, actions today   „-'
will affect the quality of
life for many future gen-
erations.
In  the  1970s,   the
United States began to
reduce the amount of
toxic pollutants entering
the Great Lakes, and sci-
entists  have  observed
tremendous improvements
since that time.  Chemical
concentrations in the  Great
Lakes have dropped sharply.  Fish
have returned to  some harbors from
which they had disappeared.  Bald eagles have gone from endangered sta-
tus to nearly the highest number ever measured in Michigan.  The number
of double-crested  cormorants, a  water bird that all but vanished in the
Great Lakes in the  1970s, has climbed to 12,000 nesting pairs.

While progress has been made, it is clear that more needs to be done.
Throughout the Great Lakes people are still advised to limit the amount of
fish they eat, and researchers still see the effects of toxic pollutants on fish
and wildlife populations.

The eight States which border the Great Lakes have recognized the need
to work together on common-sense, cost-effective solutions to reduce the
harmful effects of toxic pollution. In the late 1980s, EPA was asked to
develop a consistent approach for achieving these reductions.  By working
in partnership with the States as well as affected municipalities, industries
and the public, EPA developed the Great Lakes Water Quality Guidance
(Guidance). The Guidance was released in 1995, and States and Tribes
are now focused on implementation.

-------
 FINISHING THE JOB:  FINDING ALL SOURCES OF POLLUTION
 The primary purpose of the Guidance is to provide a consistent level of
 protection for people and wildlife who may be exposed to toxic pollutants
 from the Great Lakes. To accomplish this, the Guidance establishes pro-
 tective levels, or water quality criteria, for toxic pollutants from all
 sources. Toxic pollutants enter the basin from factories and sewage plants
 discharging wastewater into the Great Lakes or their tributaries as well as
 from other diffuse sources, such as air deposition, chemically-contami-
 nated bottom sediments, urban and agricultural runoff, hazardous waste
 and Superfund sites, and waste or product spills.

 The Guidance provides management options for reducing toxic pollution
 from factories and sewage treatment plants. It also provides alternatives for
 taking other sources into account. This approach provides States and
 Tribes with flexibility in determining how to best reduce toxic pollution
 and improve water quality.  For example, they may choose to reduce air
 emissions or clean up sediments rather than require end-of-pipe wastewater
 treatment technology. This approach encourages more cost-effective, com-
 mon sense solutions, such as:
    •  minimizing the pollution created  in the first place so that toxic
      effects and cleanup costs can be avoided;
    •  cleaning up contaminated sediments that continue to pollute the
      Great Lakes because of past practices; and
    •  using multi-media, basin-wide approaches to control various
      sources of toxic pollution.

The Guidance is just one of several efforts underway to reduce toxic pollu-
tion in the region. EPA, the Great Lakes States, Tribes, and other federal
agencies are pursuing a program to identify, prevent and further reduce
toxic discharges through implementation of the 1992 Great Lakes Five-
Year Strategy.
 THE SAC-INAW RIVER/SAC-INAW
       BAY CASE STUDY SITE

 The Saginaw River and Saginaw
 Bay are located in east central
 Michigan.

 One hundred and fifty-five factories
 and municipalities discharge waste-
 water into the waters of the Saginaw
 River and Bay. Factories in the area
 produce food products, metal  prod-
 ucts, chemicals, rubber, and  plas-
 tics. Twenty-eight facilities are con-
 sidered major dischargers.  The
 Saginaw  River and Bay are impor-
 tant commercial shipping channels.

 Toxic contamination  from PCBs,
 dioxins, and  heavy metals is both a
 historic  and  current  problem.
 Sediments contaminated with these
 pollutants are a primary concern.

 High levels of PCBs and dioxin
 have caused fish advisories.  The
 Michigan Department of Health
 issued an advisory  against eating
 carp and  catfish in 1976. This  advi-
 sory was  extended to all species in
 1978 (however, it was relaxed to
 some degree in 1986).

 Sport fishing is strong in the area.
 The walleye fishery is growing, and
 several walleye tournaments are
 held every year.  Hunting is  also
 very popular.

 Approximately 18,000 acres of
 coastal wetlands provide waterfowl
 habitat.  The  Bay  lies in  a key
 migration corridor for Canada
 geese, and  tun-
 dra swans.

 Birdwatching  is
 popular,  and  weekend
crowds gather to view
arrival  of waterfowl
each spring.

-------
  GENERAL DESCRIPTION OF THE
  BLACK RIVER CASE STUDY AREA

The Black River is in Lorain County
Ohio, just west of Cleveland, in  an
area that is primarily agricultural.

Water quality has been heavily
affected by sewage  plants and fac-
tories. There are 32 sewage plants
and facilities that discharge waste-
water in the area. Five of these are
considered to be major dischargers.

The lower Black River is a shipping
channel with a total of 12.4 million
tons  of goods shipped through
nearby Lorain Harbor in 1991. Other
industrial uses include  process
waters for  manufacturing and cool-
ing, predominantly by steel mills.

Polyaromatic hydrocarbon (PAH)
discharges and PAH contaminated
sediments are a major  concern in
the Black River. PAH contamination
led to the issuance of a fish con-
sumption and primary body contact
(e.g.,  swimming) advisory for the
lower five miles of the Black River in
August of 1993. The advisory is still
in effect.
Recreational use of  the  Black River
is limited by poor water quality and
related concerns for human health.
Currently, there  is very  little angling
even though sport  fishing is quite
popular in nearby  locations. The
river and its branches are available
for seasonal canoeing.
CASE STUDY APPROACH EVALUATED COSTS AND BENEFITS

EPA undertook the three case studies to estimate the costs and the benefits
of implementing the Guidance. Case studies are commonly used by the
government and the private sector to estimate costs and benefits where an
analysis of cumulative impact (in this case, every community in the region)
is not feasible. These case study sites were selected on the basis of:

    • data availability,
    • geographic location,
    • water quality conditions, and
    • similarity to other communities in the region.

EPA evaluated the improvements that would be  necessary in order for
the nearly 300 affected sewage plants and
factories in the case study communi-
ties to meet the water quality
criteria specified  in the
Guidance. Several types
of benefits were esti-
mated, including pub-
lic health (e.g., cancer
prevention), recre-
ation (e.g., improved
fishing), and nonuse
categories  (e.g.,
wildlife preserva-
tion). The value of
these benefits were
determined based on
survey data from those
living in the case study
areas or areas with very
similar characteristics.

-------
CASE STUDIES REFLECT
RANGE OF COSTS
The result of the case study analyses show
yearly costs of implementing the Guidance
are about $3.6 million in the Fox River and
Green Bay, $2.6 million in the Saginaw
River and Saginaw Bay, and $2.1 million in
the Black River. (For the entire Region, the
costs were estimated to be between $61 mil-
lion and $ 376 million).
IMPROVED WATER QUALITY YIELDS
PUBLIC HEALTH AND ECONOMIC
BENEFITS

The waters in the three case study areas and
throughout the region will be cleaner after
the Guidance is implemented, resulting in
less mercury, PCBs and toxic pesticides in
the fish, wildlife and people. EPA estimates
that implementation will reduce toxic pollu-
tants from factories and sewage plants by
28% in the Fox River and Green Bay, 60%
in Saginaw River and Saginaw Bay, and
37% in the Black River each year.
Pollutants  expected to be reduced include
metals (aluminum, mercury, lead, and
arsenic), pesticides (dieldrin, DDT) and
other chemicals, such as PCBs  and hexa-
chlorobenzene. (Estimates of basin-wide
toxic reductions range from 5.8 million to
7.6 million pounds a year).

As noted previously, these projected point
source pollutant reductions only address part
of the problem as other sources are being
addressed  through other EPA or State
actions.

The value  associated with these pollutant
reductions were then estimated based on rel-
evant survey data. Average benefits are esti-
mated at $4.5 million in the Fox River and
Green Bay, $4.0 million in the Saginaw
River and  Saginaw Bay, and $0.9 Million in
the Black River.
                  Cost of Reducing Toxic Pollution
ID
o
                                               $2.1
      Fox River
        and
     Green Bay
  Saginaw River
       and
   Black River
          Economic Benefits From Reducing Toxic Pollution
 at
 o
    Fox River
       and
    Green Bay
Saginaw River
     and
 Saginaw Bay
Black River

-------
THE GREAT LAKES INITIATIVE
    BENEFITS SOCIETY BY...
               Improving
                 Public
                 Health
        Enhancing
       Recreational
      Opportunities
BENEFITS AND COSTS COMPARED
The full range of benefits to be expected from reducing toxic pollution in
the Great Lakes cannot be fully captured using current economic evalua-
tion data and methodologies. Nonuse benefits, such as wildlife preserva-
tion, are particularly difficult to quantify and monetize. It is also difficult
to quantify and monetize non cancer health benefits (e.g., reduced birth
defects). Nevertheless, results from the case-study analysis demonstrate
that the steps being taken to reduce toxic pollution to the Great Lakes will
benefit communities and these benefits are commensurate with the pro-
jected costs.

Projected benefits in the case study communities are measurable and sub-
stantial, but some question whether they are affordable. An independent
basin-wide analysis of the economic impact (performed by DRI McGraw-
Hill in July 1993  for the Council of the Great Lakes Governors) shows
implementation costs will have a negligible impact on the region's econ-
omy. It is important to note that this conclusion was based on an evalua-
tion of the proposed Guidance; EPA reduced these costs by 80% before
issuing the Guidance in final form.

Based on its analysis, EPA concluded that the costs imposed by imple-
menting the Guidance will almost certainly be offset by the projected ben-
efits. These benefits include improved human health, especially for the
2.5 million sports anglers and those people who because of cultural or eco-
nomic reasons, eat large amounts of fish; enhanced recreation and tourism
which generates $70 billion for the region every year; and an increase in
commercial fishing which generates an additional $270 million in rev-
enues annually.
                                                   Comparison of Costs and Benefits
                                      tn
                                      O
                                                                                 Mid Point Benefits
                                                                                 Upper End
                                                                                 Compliance Costs
                                                                         $2.6
                                                                                   $0.9

                                                                                            $2.1
                                                                                                   I
                                             Fox River      Saginaw River     Black River

-------
ADDITIONAL INFORMATION

The cost benefit analysis and the assumptions that were used are described
in detail in the EPA publication, The Costs and Benefits of Reducing Toxic
Pollution in the Great Lakes (EPA 820-K-95-002, December 1995) or from
the actual regulatory impact analysis, entitled Regulatory Impact Analysis
of the Final Great Lakes Water Quality Guidance (EPA 820-B-95-001,
March 1995).

Copies of these reports can be obtained by calling (513)489-8910 or by
writing the United States Environmental Protection Agency, National
Center for Environmental Publications and Information, 11029 Kenwood
Road, Cincinnati, Ohio 45242.

For more information regarding the benefits and costs of the Great Lakes
Water Quality Guidance, contact:

Joan Karnauskus, EPA Region 5 Water Division (Chicago). .312-886-6090

Wayne Jackson, EPA Region 2 Water Division (New York)  .212-637-3709

Charles Sapp, EPA Region 3 Water Division (Philadelphia)  .215-597-9096

Jim Hanlon, EPA's Office of Water (Washington, DC)  	202-260-5400

Mark Morris, EPA's Office of Water (Washington, DC)  	202-260-0312
                                                                                       \

-------

-------