Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin
Hongxing Liu, Wendong Zhang, Elena Irwin, Jeffery Kast, Noel Aloysius, Jay Martin, Margaret Kalcic
April 2020 [20-WP 601]
Liu, H., W. Zhang, E. Irwin, J. Kast, N. Aloysius, J. Martin, and M. Kalcic. 2020. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin." Working paper 20-WP 601. Center for Agricultural and Rural Development, Iowa State University.
We develop the first spatially integrated economic-hydrological model of the western Lake Erie basin explicitly linking economic models of farmers' field-level Best Management Practice (BMP) adoption choices with the Soil and Water Assessment Tool (SWAT) model to evaluate nutrient management policy cost-effectiveness. We quantify tradeoffs among phosphorus reduction policies and find that a hybrid policy coupling a fertilizer tax with cost-share payments for subsurface placement is the most cost-effective, and when implemented with a 200% tax can achieve the stated policy goal of 40% reduction in nutrient loadings. We also find economic adoption models alone can overstate the potential for BMPs to reduce nutrient loadings by ignoring biophysical complexities.