The International Joint Commission (IJC) selected ECT to better understand the socio-economic and policy implications of HABs in western Lake Erie. This study was the second phase of a previous IJC-funded study and further examined the implications of extensive HAB events, like the ones that occurred in 2011 and 2014. The previous study identified many important issues and quantified some – but not all – of the socio-economic implications of western Lake Erie HABs. This project extended the Phase 1 study by further evaluating HAB effects to regional economic welfare, including effects to recreation, water withdrawals, tourism, and property values.
International Joint Commission
Economic valuation of natural resource damages and ecosystem services
Lake Erie Basin
- Property values: This study quantified $3.458 billion in residential housing potentially at risk for being impacted by harmful algal blooms (HABs) events. For the 2011 HAB, this approach estimated lost property value services of $9.781 million for shoreline property owners and $7.087 million for nearshore property owners. For the 2014 HAB event, shoreline property owners were estimated to have lost $10.05 million in property value services, while nearshore owners lost $7.864 million.
- Tourism: This approach indicated Ohio tourism dollars at risk range from $66 to $305 million. Associated high-end lost profits were $20.79 million and low-end lost profits were $165,000. In Michigan, $24.78 million in tourism income was at risk. This was associated with high-end lost profits of $1.685 million and low-end estimates of $124,000. Similarly, Canadian tourism economic impacts totaled $17.3 million, with high and low profitability impacts ranging from $1.6 million to $59,000.
- Recreation: The overall benefits to recreation from the lack of a HAB event were $31 million for 2011 and $23 million for 2014.
- Potential implications of HABs for water treatment: The only information available identifying the costs for water treatment indicated approximately $3 million per year was being incurred.
- Overall impacts: The total impact of ecosystem service interruptions from the 2011 HAB event was found to cost roughly $71 million. For the 2014 HAB event, the estimate was roughly $65 million.