BEMIDJI, Minn. — Not surprisingly, Minnesotans love their lakes. However, a recently completed Bemidji State University study determined that Minnesotans were also willing to pay for the restoration of lakes impaired by pollution.

The study, conducted by Dr. Pat Welle, professor of economics and environmental studies at Bemidji State and principal researcher for the project and Jim Hodgson, Upper Mississippi River Basin coordinator for the Minnesota Pollution Control Agency, was funded by the MPCA in collaboration with the Sauk River Watershed District and the city of Lake Shore, Minn.

The study, conducted on the Lake Margaret-Gull Lake Watershed near Brainerd, Minn. and the Sauk River Chain of Lakes between Richmond, Minn. and Cold Springs, Minn., determined the willingness of property owners to pay and which best management method of pollution control they would pay for their expenditure.

Environmental benefit leading to economic benefit was seen as a key driver for the willingness of the majority of property owners to contribute financially to lake restoration. The study also attempted to estimate the economic value of the environmental benefit of lake restoration, in an effort to guide policy makers in their attempts to determine the best methods of reducing the pollution impact on lakes and the cost of implementing those methods.

In the first quarter of 2008, following a pilot study of 300 households each of the two study areas, more than 2,000 mail surveys were distributed to a random sampling of property owners in each of the project’s two focal watershed districts.

“Nearly 1,100 households responded to the survey,” Welle said. “The results showed property owners in the Lake Margaret watershed willing to pay an average of $267 a year for lake restoration and Sauk River watershed residents willing to pay an average of $17 per year.

“While the the amounts may at first glance appear to be quite different, they should be thought of as a range of willingness to pay for water quality improvements by the residents of the watersheds,” he added.

The difference in the values reflected the differences in the basic characteristics of the two study areas. The Sauk River area is an expansive 602,000 acres with less than 10 percent surface water, and a majority of the respondents to the survey neither lived on nor used the lakes for recreational purposes. By contrast, the Lake Margaret area is a fraction of the size at 18,340 acres with nearly half of that being surface water, and a majority of the respondents in that area were either owners of lake shore property or off-lake property owners who recreate on the lakes three or more times per week.

Hodgson indicated that while the two watersheds selected for the study shared the common characteristic of an impaired principal lake, their differences were key to their selection in the study.

“When looking at 164 nutrient-impaired lakes in the Upper Mississippi River Basin, we were looking at two watersheds in different parts of the basin to determine if regional differences would appear,” Hodgson said. “We were looking for potential ranges of economic benefit determination.

“For example, for lake watersheds similar to Sauk River, we would expect the economic benefit for resident users and property owners to be in the low double digits,” Hodgson added. “Likewise, for systems more like Lake Margaret, the benefit would be much higher.”

However, while the study indicated a willingness to financially support cleanup efforts, it also identified an equity issue amongst those willing to support cleanup.

“While survey participants indicated a willingness to help pay for cleanup of the lakes, they also wanted those responsible for the degradation and the benefitted owners and lake users to pay their share as well,” Welle said. “In any policy discussions on how to pay for these types of projects — fees, property taxes or other funding methods — these equity issues need to be considered by policy makers.”

The complete study has been published on the Web and is available to the public. Those interested in obtaining a copy of the study may download a copy in Adobe PDF format at:
http://www.pca.state.mn.us/publications/wq-b4-01.pdf

For more information about the study contact Dr. Pat Welle, Department of Environmental, Earth and Space Studies, Economics and Sociology at Bemidji State University at (218) 755-4103 or via e-mail at pwelle@bemidjistate.edu, or Jim Hodgson, Minnesota Pollution Control Agency at (218) 828-6065, or via e-mail at jim.hodgson@pca.state.mn.us.