Matthew Bingham’s research while affiliated with Veritas and other places

Nutrient loading and warming waters can lead to hazardous algal blooms (HABs). Policymakers require cost-effective valuation tools to help understand impacts and prioritize adaptation measures. This chapter evaluates the tourism impacts of HABs in Western Lake Erie based on HABs that occurred in 2011 and 2014, both through a unique temporal and spatial specification of HAB severity as well as input/output analysis and decomposition of trips and profitability.

Monetizing ecological benefits of reducing impingement and entrainment (I&E) at cooling water intake structures presents both ecological and economic challenges. Ecological challenges arise because it is difficult to demonstrate and measure these impacts. Economic challenges arise because of these ecological uncertainties and because many of the potentially affected ecosystem services cannot be valued using traditional methods. Under a recently promulgated U.S. regulation certain power generation and industrial water permit applicants may be required to monetize these “nonuse” benefits. However, stated preference (SP) surveys, the only method available for valuing nonuse services have not seen acceptance by mainstream economists. This paper describes an approach to valuation that incorporates the ecological service function approach advocated by the USEPA Science Advisory Board to characterize impacts. Data and models are used to quantify, to the extent possible, direct and indirect impacts of I&E on ecosystem services. Nonuse values are then estimated by an SP survey that measures respondents’ willingness to pay for reducing I&E. Methods are proposed for calibrating and validating results including identifying the source of nonuse values from commonly ascribed motivations (i.e. existence, bequest, altruistic), considering the role of pre-survey awareness of impacts, and evaluating results in the context of respondent willingness to pay for other nonuse benefits.

For a ‘discrete choice experiment’ to gauge consumer preferences for alternative electric service plans, surveys were administered to over 1000 residences in 12 electricity markets. The resulting estimated choice function parameters provide insights into the importance consumers place on individual features. Several demographic effects were identified that associate preferences with customers, providing powerful and actionable market segmentation tools.

USEPA conducted a stated preference survey to estimate the total value that would accrue to the public as a result of impingement and entrainment (I&E) reductions. Nonuse values are included in this total value. They are also a category of evaluation in the rule’s Benefit Valuation Study (§122.21(r)(11). EPA’s discussion on extrapolation suggests that the results from the survey could be applied to the unsurveyed population. EPA’s survey instrument contains an information treatment that explains I&E. Correctly extrapolating the survey results to the general population requires that the general population have the same level of knowledge about I&E, without having received the information treatment, as the survey respondents have with receiving the information treatment. Awareness of I&E impacts may potentially be low among the general public, suggesting that the survey’s results cannot be directly extrapolated to the majority of U.S. residents. However, no efforts have been undertaken to identify who is aware of I&E. This presentation presents the results of the 2012 Environmental Impacts Awareness survey which evaluates the aware population. The survey results indicate that approximately 10 percent of the population has knowledge of aquatic impacts from steam electric plants. However, no respondents specifically mentioned impingement and entrainment.

According to the proposed rule, “the Director may reject an otherwise available technology as BTA standards for entrainment mortality if the social costs of compliance are not justified by the social benefits… ((§125.98(e) p. 22,288).” Regardless of whether the facility could afford to install cooling towers or would prematurely retire rather than retrofit, prop­erly identifying and quantifying the social costs of cool­ing towers will play a compelling role in strategic com­pliance that goes beyond the results of a ledger-based comparison of engineering costs and fishery benefits. This presentation describes the difference between engineering costs and social costs and considers important social costs that may accompany closed cycle cooling conversion requirements. These include the social costs of both shutdowns and conversions. For both cases, important social costs considered include system-level efficiency and air pollution impacts as well as those arising from the loss of winter fisheries and flushing flows. For shutdowns, additional social costs covered include asset loss, reliability impacts, and local economic impacts. For conversions, additional social costs covered include unit efficiency/capacity reductions and system level air pollution impacts that result from them. These also include important social costs of the towers themselves such as viewshed impacts to property values.

This presentation describes the economic components of EPRI’s integrated assessment that estimates the costs and the economic, reliability, and environmental impacts of a regulation that requires converting existing electricity generating units that use once-through cooling to closed-cycle cooling. Such a regulation would alter the technology and economics of existing facilities that currently use once-through cooling. Some owners would decide to prematurely retire their units rather than retrofit, while others would retrofit and operate in the post-regulation marketplace. The outcomes associated with these compliance and operational decisions ultimately register in the financial performance of the electricity industry; the industry’s environmental footprint; and the economic welfare of electricity industry employees, consumers, and shareholders. Results of the economic assessment including price impacts and unit closures are presented for five U.S. electricity markets: Pennsylvania New Jersey Maryland Interconnection (PJM), Electric Reliability Council of Texas (ERCOT), Independent System Operator-New England (ISO-NE), Midwest Independent System Operator (Midwest ISO), and the New York Independent System Operator (NYISO). These results arise from application of an economic simulation of these electricity markets. The simulation model employs a mathematical representation of economic conditions and behavior. In the model’s market simulation, owners of once-through facilities elect to install the new cooling systems if they expect the present value of the future stream of profits with closed-cycle cooling to exceed the costs of installing and operating the closed-cycle system.

A national closed-cycle-cooling-retrofit (retrofit) requirement will affect fish that are both caught and uncaught. Uncaught fish do not have a traditional use value and are therefore categorized as having potential nonuse values. Nonuse values are the values that people may hold for a resource independent of their use (i.e., some people may benefit simply from knowing the resource exists—either because they want it to be available for people to use in the future or because they believe the resource has some inherent right to exist). Currently, the only methods available for estimating nonuse values are survey-based techniques that ask respondents to value, choose, rate, or rank natural resource services in a hypothetical context. Because these methods rely on respondents stated intentions and not their actual choices, the reliability of this approach for providing meaningful estimates for policy decisions is questionable. The relevant literature has long noted and thoroughly documented the difference between people’s stated intentions and actual behaviors. With respect to evaluating the benefits of a national retrofit requirement, preliminary investigations suggest extreme sensitivity of aggregate benefits to relatively small changes in willingness-to-pay (WTP) estimates (WTP is the metric used to develop nonuse values). The corresponding imprecision in aggregated nonuse-value estimates may be the difference between a national rule that is justified on a benefit-cost basis and one that is not. The causes of imprecision can be categorized in the following three general areas: * Survey Instrument and Sampling Approach * Incorporating Statistical Uncertainty into the Experimental Design * Weighting and Extrapolation of Survey Results This presentation discusses the potential causes and implication of imprecision in each of these areas and identifies ways that they can be addressed to improve the potential validity of national estimates.

Although many recreational anglers reside in urban areas, important policy questions, such as how to optimally improve urban shorelines and increase urban angler participation rates, are unresolved. This article presents an econometric model that quantifies the relationships between site quality, angler characteristics, and urban angling behavior in five northeastern New Jersey counties. The model employed (repeated nested logit) is prominent in the environmental economics literature but has not to our knowledge been applied to urban fishery management. The results indicate that the repeated nested logit can effectively characterize urban anglers’ site choices, participation rates, and resource values. The article presents two models whose differences highlight considerations in modeling urban angling behavior. The first includes variables typically found in recreational-fishing, site-choice models. The second (and preferred) model includes variables that more appropriately characterize urban angling. This model predicts approximately 2,341,000 total annual trips. Adding a fishing site in a centrally located but industrial area (Newark) generates direct economic benefits to recreational anglers that are estimated at US$101,179 per year. The new site is expected to draw 1,571 trips annually. Of these trips, 154 are new and 1,417 are diverted from other sites. Adding a new site with similar characteristics on the same water body in a less industrial area (Garfield) generates estimated direct benefits of$312,419 per year. This new site draws an expected 14,814 trips annually. Of these trips, 247 arise from increased angling rates and 14,567 are diverted from other sites. These results illustrate the usefulness of this modeling approach for assessing management objectives. For example, a manager hoping to increase angling participation might prefer the Newark project if it could be completed at half the price; a manager intending to maximize social benefits or reduce pressure at other sites would pay a substantial premium for the Garfield project.Received November 3, 2009; accepted December 30, 2010