Nonpoint Source Abatement Costs in the Kentucky River Watershed

A growing share of water pollution in the U.S. can be attributed to nonpoint sources (USEPA 2002). Some of this trend can be attributed to declining point source (PS) emissions as a result of regulation under the Clean Water Act (CWA). However, fertilizer-intensive practices used to improve agricultural productivity over recent decades have also increased nitrate loads and resulted in water quality impairments. Nonpoint source (NPS) pollution from agricultural practices is generally exempt from federal regulation. However, some voluntary programs allow point sources subject to the CWA’s effluent limitations to meet their standards by purchasing offset credits reflecting reductions in NPS discharges to the same waters (USEPA 2004). Such water quality trading (WQT) programs have been implemented in a number of states to reduce pollution abatement costs (Breetz et al 2004). In this setting, NPS supply pollution abatement when they implement best management practices (BMP) that reduce nutrient loads, and the cost of BMPs form a supply curve for credits. WQT programs are supported by the EPA as an important means for efficiently pursuing water quality goals (USEPA 2003a). Among the BMPs available for water quality management, riparian buffer strips have proven effective in mitigating the movement of nutrients and other pollutants into surface waters (Qiu et al 2006). Estimates of riparian buffer costs would be valuable for developing policy related to WQT and other conservation programs. This paper estimates the annual costs of buffer strips in six counties in the Lower Kentucky River Basin, as part of a project evaluating the feasibility of WQT programs in that area.