Natural Resources and Conservation

Surface water is among Earth's most important resources. Yet, benefit–cost studies often report that the costs of water quality protection exceed its benefits. One possible reason for this seeming paradox is that often only a narrow range of local water quality benefits are considered. In particular, the climate damages from water pollution have rarely been quantified. Recent advances in global water science allow the computation of the global methane emission from lakes caused by human nutrient enrichment (eutrophication). Here, we estimate the present value of the global social cost of eutrophication-driven methane emissions from lakes between 2015 and 2050 to be $7.5–$81 trillion (2015 $US), and in a case-study for one well-studied lake (Lake Erie) we find the global value of avoiding eutrophication exceeds local values of either beach use or sport fishing by 10-fold.

Severe ambient water pollution is common in many developing countries. A broad array of regulatory and other policy approaches can improve water quality, but some approaches are more well-studied than others, and there are many additional challenges specific to the developing country setting. This paper describes a set of prescriptive, market-based, voluntary and other policy instruments to control water plllution and reviews empirical assessments of these approaches in practice, focusing primarily on developing countries. We also examine additional challenges such as data availability, monitoring and enforcement, rent-seeking, and the issue of decentralization. The paper highlights important gaps in published empirical research on these issues, which increase in importance as the evidence accumulates regarding water pollution's impacts on outcomes such as health, human capital, and productivity.