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
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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.
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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.
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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.
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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.
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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
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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
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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
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