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URBAN WATERSHED
MANAGEMENT UNDER CONFLICTING OBJECTIVES—APPLICATION TO THE ROOT RIVER Primary Investigator: Dr. Vladimir Novotny Sponsor: S.C. Johnson Fund Community Involvement Awards and Wisconsin Foundation of Independent Colleges Duration: September 2000 – May 2002 Funding Level: $10,000 Urban watersheds often suffer from poor water quality and flood risk as a consequence of existing and ongoing urbanization. Watershed projects that focus on flood control and on improving the ecological integrity of urban watersheds are typically expensive. Indeed, it is not uncommon for a watershed improvement with both flood control and water quality improvement characteristics to cost more than $50 million. If decision makers are to efficiently allocate public resources, then the relative costs and benefits of such management alternatives must be quantified. The valuation of flood control and ecological risk reduction characteristics of watershed projects is challenging given that both characteristics may involve nonmarket goods. That is, consumers of these goods do not reveal their preferences in traditional markets. Rather, nonmarket techniques must be used. One of the most popular approaches is the Contingent Valuation Method (CVM). This method is a survey-based approach in which residents of a region are directly asked to state their willingness to pay for the good. A recent study sponsored by the U.S. Environmental Protection Agency and the U.S. National Science Foundation used CVM to derive separate benefits of maintaining flood risk and improvements in stream water quality in the Oak Creek and Menomonee River watersheds. These watersheds are located in Milwaukee County, Wisconsin. Most CVM studies are costly since they involve primary data collection. For example, the cost associated with the aforementioned study exceeded $200,000. Given the expense, use of the approach frequently is not feasible. A less costly alternative is to use the Benefit Transfer Technique (BTT) in which a study conducted in a particular location (i.e., study site) is used to derive benefits in another location (i.e., policy site). In this study, the various issues that need to be considered before BTT is applied were evaluated. Then the BTT, where the Oak Creek and Menomonee River watersheds were used as the study site, was applied to derive benefit estimates for flood control and ecological risk reduction to the Root River watershed (policy site), which is a contiguous watershed to the south of the study site. The findings suggest that flood risk benefits are minor, and relatively lower than the benefits associated with ecological risk reduction (see Institute Report No. 12 for full details).
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