Course:ECON371/UBCO2011WT1/GROUP2/Article 2 : The Great Lakes

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http://www.reuters.com/article/2011/10/04/us-greatlakes-idUSTRE7937CY20111004

Summary

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Due to extensive pollution in the great lakes a large ecosystem imbalance is occurring putting many of the lake species at risk. In Lake Huron there has already been a 95% loss in fish biomass over the past 15 years and a 94% decrease in freshwater shrimp in Lake Michigan which are a huge contributor to the local fishing economy. These fish are dying out because of a large influx of the Prolific Quagga mussel population which coats the bottoms of lakes killing off plankton. Plankton are a key member of the lakes food web, being right at the bottom first causing smaller fish to die off and then leading to the starvation of larger fish such as freshwater salmon. The mussels causing this significant damage are not native species but were brought in on the ships coming in from overseas. Another major cause of the dying fish population is the explosion of toxic algae blooms, especially in Lake Erie. These algae blooms cause an oxygen depleted dead zone killing off fish and the other organisms in the lakes. The major cause of the rapid increase of the algae population is an excess of food due to fertilizer runoff from farming drastically increasing the phosphorous content of the water. The Great Lakes are a major fishing and water source in the world and currently this fragile ecosystem is close to shutting down completely due to human interference.

Analysis

Environmentalists are recommending a policy in where land surrounding the lakes would not be used for farming as a barrier to keep out phosphorous. Stopping this leeching of phosphorus into the water supply would stop the formation of massive algae blooms in the lakes and the formation of oxygen depleted dead zones. This would allow the fish population to begin to flourish adding valuable biodiversity and fishing industry causing a large benefit. The cost of this would be the loss of farming value in the land surrounding the lakes. This approach is a standard by which all farms are set to conduct their business at.


Another way of cleaning the algae blooms out of the lakes is through the use of water purification. This process is fairly simple, however it has an external cost of an unpleasant odor that surrounding residents complain about making it a less desirable option.


It is also being discussed that the farmers should leave a larger buffer zone from their farms to waterways. A way the government could enforce this new rule is by taxing the farmers who are based closer to the waterways more heavily then the farmers who have buffered them self’s farther away from the waterways. This may seem unfair to the farmers who are being taxed more then their competition just because of where they decided to build their farm. Individual standards would be much more appealing then uniform standards in this case for the firms who did leave a buffer zone between their farm and the waterways.


The Great lakes are being destroyed by runoffs from farmers that are based along the waterways to the lakes. The cause of the algae blooms is said to be the phosphorous from the fertilizer the farmers use, creating runoffs of this unwanted chemical into the lakes. It is very difficult to tax the farmers for the destruction of the lakes because this is a nonpoint source pollutant, making the phosphorous hard to measure. It is possible though to go beyond trying to tax the farmers and instead go directly to the source, the fertilizer. The government could tax the fertilizer, creating the price of fertilizer to rise. The farmers would then purchase less of this product and try and find a more environmentally friendly substitute. Also, it would give the farmers a reason to use the fertilizer more carefully and try to create less waste when using this product.


The lakes also have a large problem with an excessive supply of the foreign mussel species which is destroying the plankton and as result all the other organisms in the lake that are higher on the food web. The cost of loosing this fish is made up by the loss of fishing industry from fish such as large water salmon and as a loss in biodiversity. To remove this problem one solution would be to introduce a mussel eating fish to keep the population of fish in check. This comes with many concerns about how the new species will interact with the already existing organisms in the lake, especially since the current problem started with the introduction of a new species. The new species would most certainly decrease the mussel population however it may interfere with the existing species and have a lurking negative externality. The fishing industry in the lakes is valued at 7 billion dollars so if the ecosystem were permanently destroyed there would be a detrimental economic loss.

The cost for cleaning up the lake has an estimate of 7 billion dollars. However, that only captures a portion of the cost. For each day this algae is not cleared up, the opportunity cost will increase because eventually, this lake will have to be either removed or restored. In addition, the lake is somewhat a public good but now this lake generates little benefits since it is polluted. The polluted lake will also generate externalities that will affect many 3rd party users; such as people living near the lake. Thus, it is logical to enforce a blockade for the water runoff from the argriculture farmlands. And since, the runoffs are easily located, it would temporarily decrease the aglae from growing. Therefore, the cost to enforce the blockade first, is generally cheaper and unlike the clean up cost, affordable.

Conclusion

There has already been significant damage from the interaction of humans to these lakes which already may not be able to be reversed and will cost a great deal to try and sustain the ecosystem. From this article we can see that ecosystems are a very delicate system that can be destroyed from very simple seemingly harmless activities and should be handled with great care and thought as to not cause these large problems again and so they can be sustained for the use of future generations.

Profs Comments

Nice discussion of some policy solutions. The one you didn't consider was a subsidy to pay farmers to leave buffers near waterways. This is actually being done in some areas.

9/10