Environmental Economics

Environmental Economics Environmental Economic Impact of Pollution in the Chesapeake Bay The Chesapeake Bay is the nations largest estuary with six major tributaries, the James, the Potomac, the Susquehanna, the Patuxent, the York, and the Rappahannock Rivers, feeding into the bay from various locations in Maryland, Virginia, Pennsylvania, and the District of Columbia (Chemical Contaminants in the Chesapeake Bay Workshop Discussion 1). These areas depend on the Bay as both an environmental and an economic resource. Throughout the last 15 years the Chesapeake Bay has suffered from elevated levels of pollution. Nitrogen and phosphorous from wastewater treatment plants, farmland, air pollution, and development all lead to reduced water clarity and lowered oxygen levels, which harm fish, crabs, oysters and underwater grasses (Key Commission Issues 1). There are other types of pollution in the bay such as toxic chemicals, but because nutrient pollution is the most significant and most widespread in the Bay its effects are the most harmful to fisheries. Nitrogen and phosphorous fuel algal blooms which cloud the water and block sunlight from reaching underwater grass beds that provide food and habitat for waterfowl, juvenile fish, blue crabs, and other species (Blankenship 11-12).

Algae plays a vital role in the food chain by providing food for small fish and oysters. However, when there is an overabundance of algae it dies, sinks to the bottom of the Bay, and decomposes in such a manner that depletes the oxygen levels of the Bay (11). The reduced oxygen levels in the Bay reduce the carrying capacity of the environment and these dead areas sometimes kill off species that can not migrate to other areas of the Bay, such as oysters (11). Increased abundance of algal blooms also led to the overabundance of harmful and toxic algae species and microbes such as the microbe Pfiesteria, which was responsible in 1997 for eating fish alive and making dozens of people sick (12). The heightened awareness of diseases that can be contracted through consumption of contaminated fish also has an economic impact. Therefore, the excess levels of nitrogen and phosphorous have fueled an overabundance of algal blooms, which has reduced water clarity and lowered oxygen levels, affecting many species within the bay and ultimately the industries that rely on these species. The signing of the 1987 Chesapeake Bay Agreement marked the first joint venture between Virginia, Maryland, Pennsylvania, the District of Columbia, the Environmental Protection Agency, and the Chesapeake Bay Commission to improve water quality by reducing point and non-point source pollution (The Chesapeake Bay Watershed 1).

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The goal of this program was to reduce the level of nitrogen and phosphorous flowing to the Bay by 40% by the year 2000, from their 1985 levels (Blankenship 2). The first step in this program was to reduce the amount of nutrient pollution from point sources (end-of-the-pipe) such as wastewater treatment facilities that feed into the many tributaries of the Chesapeake Bay (The Chesapeake Bay Watershed 1). However, the results of these cleanup efforts were not enough to reach the goal of the program. Therefore, the areas involved now had to target the non-point sources of nitrogen and phosphorous. The non-point sources are storm water run off from agricultural and developed sites, air pollution, and the development of sensitive forests that act as buffers for tributaries and the Bay (1). The Chesapeake Bay Preservation Act of 1989 took aim at these sources in Tidewater Virginia by requiring resource management practices in the use and development of environmentally sensitive land (1). The Chesapeake Bay Preservation Area Ordinance of 1991 also took aim at these non-point sources by designating environmentally sensitive areas in Virginia Beach as Resource Protection Areas and Resource Management Areas which are intended to protect the integrity of the lands that effect the Chesapeake Bay (2).

The States involved also enforced tougher car emissions policies so that the air pollution contribution would be reduced (2). These ordinances were aimed at reducing the pollution of the Chesapeake Bay by reducing high levels of phosphorous and nitrogen. The governments policies effect the economy in the Chesapeake Bay by changing the ways in which industries distribute their waste. The pollution and over-harvesting of the Chesapeake Bay have greatly effected the economy of the area. The net economic condition of the region is caused by the downward swing of fishery output and sales due to the pollution in the Bay as well as the businesses that are effected by the government mandates. There has been a significant downturn in the net profit of the fisheries due to sewage runoff and development around the Bay. The government has recognized the pollution as a problem for economics and bio-diversity.

Stated governments, mainly Maryland, have made attempts to reduce pollution by making command and control policies that further hurt the inland economy in an attempt to alleviate Bay damage. The solutions to the pollution problems in the Bay are not easily defined because the government must weigh the rights of the polluters to those being hurt by the pollution and try to come up with ways to get closer to the optimal points for both inland and off-land firms at least cost to both parties. The Oyster fisheries that depend on the Chesapeake Bay are also suffering greatly due to pollution and over-harvesting. The added nutrients, mainly Nitrogen and Phosphorous, are lowering the oyster population and causing fisheries to harvest a significantly lower number of bushels each day. The Oysters importance as a prized food, a vital industry, and an organism that filters pollution is universally recognized (Meyer 1991, 26). The Supply of oysters has decreased greatly causing the price to rise.

Restaurant owners in the Bay area say that the price of oysters and crabs has risen so greatly that they can no longer make a profit off of the victuals (Lipske). The hazard of serving oysters has increased because they are usually served raw and pollution related diseases that the oysters carry could harm humans. The fisherman themselves have decreased their profit due to a disease that is wiping out a great deal of the oyster population in the Chesapeake Bay. The parasite is called Multinucleated Sphere X (MSX), it may be caused by the fact that oysters feed by filtering particles suspended in water which helps to clear pollution. These particles, due to the excessive amount of pollution have weakened their immune system, making them more susceptible to disease (Impacts of Disease and Disease Resistant Oysters). To counteract the downturn in oyster harvesting the government, economists, as well as environmental theorists have offered a number of plausible solutions.

Due to the disease, harvest output has decreased causing some to contend that the easiest way to fix the problem is to increase the population artificially. A Japanese Oyster species could be introduced to the Bay area, the oyster is resistant to the MSX parasite. The benefit to the oyster fisheries would be great because these oysters are more desirable on the market due to their size and they would multiply quickly. The major risk of this project is that if the oyster does not act precisely like the native oyster the costs to the habitat would be great. Introducing a non-native organism into a habitat has great costs if it overtakes the environment, which happens often when no native predators exist to keep the population under control.

If the new oyster species over populated the bay the costs to the other industries that depend on the bio-diversity of the Bay would be greater than its benefits to the oyster industry. Another solution offered to help the Bay is mandates on development in certain zones surrounding the Bay. Although the decrease in sediment runoff into the …