from Pioneer Press:
Lake Pepin problem goes deeper than sediment
By Edward Lotterman
Updated: 12/21/2011 09:55:26 PM CST
Lake Pepin is filling with sediment, slowly but steadily. That hurts Minnesotans and Wisconsinites in particular. Yet, the only policy measures currently available to reduce this are unfair and economically wasteful. This need not be.
Twenty years ago, the nation had an opportunity to move to more market-friendly methods of dealing with environmental problems.
Economists finally had convinced many Democrats of the advantages of approaches such as emissions taxes and tradable permit systems that had long been advocated by environmentally knowledgeable Republicans. There was a core of bipartisan support in both houses of Congress for sensible reforms to environmental policy, just as there was for health care and other problem areas.
But a golden window of opportunity closed, never to open again, in 1990 when President George H.W. Bush’s chief of staff, Richard Darman, told Congress the administration had nothing else it wanted to accomplish in the remaining two years of its term. It had no policy reform initiatives at all: none, nada, zip.
Why does this matter? Lake Pepin, on the Mississippi River downstream from St. Paul, is a valuable resource not only for its scenic beauty and recreation opportunities but also as a vital part of the river’s ecosystem. But it is rapidly accumulating sediment that, if unchecked, eventually will turn it into shallow marshes and mudflats.
Some of the sediment comes from municipal storm and wastewater outfalls. Most comes
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from “nonpoint sources” such as runoff from rural land, general stream bank erosion and so forth. Much of this agricultural sediment comes from the Minnesota River that empties into the Mississippi at Fort Snelling.
The Federal Clean Water Act requires measures to reduce this sedimentation. But the EPA’s power to regulate farming activities is limited. So the burden falls on municipalities, in this case the 217 within the South Metro Mississippi Watershed that contribute some 6 percent of the sediment flowing into Lake Pepin. They may have to spend more than $800 million to reduce their sediment contributions, with no material effect on Lake Pepin.
This is a case study in microcosm of the worst approaches to pollution abatement.
Silting in a beautiful and environmentally useful lake like Pepin is a real cost to society, but an “external” one that occurs as a collateral outcome of other economic activities of production or consumption. If the silting is not reduced, society will be worse off. Yet, there is no neat way to “internalize the externality,” in the jargon of economists.
The fact that most of the sediment comes from nonpoint sources is a major problem. When you can identify a discrete set of power plant smokestacks as the source of pollution, control is relatively straightforward. Ditto if the pollution results from burning a specific fuel, such as gasoline. But when it is impossible to identify how much pollution is coming from which square mile of land, any response is more difficult.
One could just ignore the problem or claim it does not exist, as we are doing with greenhouse gases. Or one could throw up one’s hands and say there is no feasible way to deal with the problem. Or one could take the small actions that are legally and administratively possible, even if the effects are only symbolic. That is what we are doing by forcing municipalities to spend hundreds of millions of dollars to achieve a minuscule reduction in sediment. But the costs clearly outweigh the benefits.
However, as for nearly any productive activity, abatement costs are not linear. There are cheap ways to reduce sedimentation. But costs rise as you try to reduce it by greater and greater amounts. This is an example of the “diminishing marginal returns” or “increasing marginal costs” that students learn in introductory microeconomics.
The challenge is to have policies that focus resources on the most cost-effective abatement measures first. A system of tradable permits would do this, even if it would be tricky to administer in situations of agricultural runoff.
City administrators and others involved clearly understand this. If they are going to be forced to spend millions of dollars to reduce sediment, they could achieve much larger reductions of sediment by reducing farmland or riverbank erosion upstream than by spending the money on their own sewage and stormwater systems. But there is no existing way to do this.
Had we moved to a market-based approach to pollution abatement 20 years ago when the political constellations were in alignment, we would have saved a lot of money and would have a much better chance of saving Lake Pepin.
But given sentiment on the political right against anything involving a “tax” such as emissions fees or anything labeled “cap and trade,” we are locked into the same old wasteful approach we have followed for 40 years now. It is not really Dick Darman’s fault, but rather our own collective bull-headedness.
St. Paul economist and writer Edward Lotterman can be reached at [email protected].
