Assessment of Economic Incentives for Achieving Lake Erie Phosphorus Targets

Lake Erie is severely stressed by hazardous and nuisance algal blooms due to an excessive phosphorous load into the Lake from agricultural and urban non-point sources and urban point sources. The Lake is experiencing a worsening trend of eutrophication, with hazardous algae covering more than half the surface area during the late summer and fall, and Cladophora growing in the nearshore areas of the Eastern Basin. 

The Great Lakes Water Quality Agreement, Annex 4 or The Nutrients Annex, requires Canada and the United States to decide upon new targets for phosphorus reductions and draft Domestic Action Plans for meeting the new targets. The reduction for Canadian sources into the Western and Central Basin is 40% of the 2008 load, or 212nes per year (mT/yr). The primary sources of phosphorus to Lake Erie are non-point source runoff from agriculture and urban areas and wastewater treatment plants. The phosphorus enters the Lake via drainage systems, creeks, groundwater, tributaries and direct discharges of wastewater effluent. Previous work by Environment and Climate Change Canada (ECCC) has identified the cost of not meeting these targets in Lake Erie and a recent policy scenario analysis, carried out by ECCC, amongst others, , concluded that a range of best management practices (BMPs) will be required, and that they must be implemented with a variety of public policy tools. Various studies of best management practices (BMPs) have been completed to assess the effectiveness of implementation. These include descriptions, general assessment of effectiveness and geographically specific assessments.

The goal of this project is to identify and assess options for implementing economic instruments to meet the phosphorus reduction targets for Lake Erie. ECCC requires advice on the most promising economic instruments for application in the Lake Erie Basin, the costs and benefits of these economic instruments, the potential of any economic instrument to influence behaviour and the success of these measures where they have been applied in other selected jurisdictions. This contract will contribute to the information needed to develop a domestic action plan to reduce phosphorus for Lake Erie by providing options for meeting the new phosphorus reduction targets.