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Concentrated Animal Feeding Operations (CAFO):. Benefits Analysis for Effluent Guidelines and NPDES Regulations. CAFO Background. Industry consolidation in large livestock operations Final Rule (Dec. 2002) replaces 25-year old technology requirements and permit regulations

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concentrated animal feeding operations cafo

Concentrated Animal Feeding Operations (CAFO):

Benefits Analysis for Effluent Guidelines and NPDES Regulations

cafo background
CAFO Background
  • Industry consolidation in large livestock operations
  • Final Rule (Dec. 2002) replaces 25-year old technology requirements and permit regulations
    • Reduces pollutants from feedlots and land application,
    • Removes exemptions for stormwater-only discharges,
    • Coverage expands to include additional poultry, immature swine, and immature dairy facilties,
    • Covers 15,500 ‘large’ operations (originally 4,500)
benefits million yr 2001
Benefits ( million/yr, 2001$)

Note: Total Annual Pre-tax Costs = $290 million

methodology decisions
Methodology Decisions
  • METHOD for Recreational Use and Nonuse:
    • National Water Pollution Control Assessment Model
    • Water quality indices, and
    • Benefit transfer
  • Efficient approach for:
    • Estimating national-level benefits (use + nonuse)
    • Addressing variety of conditions across nation,
    • Filling in data gaps (e.g., baseline concentrations)
  • Relatively cost-effective versus primary valuation study (Lack of options?)

Overview of Recreational and Nonuse Methods

Land Use data

for Nonpoint loads,

Point sources


Model CAFO


Assign loads to Agriculture Cells

Route loads to stream reaches



Water Quality Index

Water Quality Ladder

Apply $WTP/Index unit

Apply $WTP/Use

water quality characterization
Water Quality Characterization

WQ Index

WQ Ladder















definitions of wq
Definitions of WQ
  • BOD, Fecal coliform, NO3, PO4, TSS for 830,000 “reach” miles. For each reach:

Index Approach

  • Ladder Approach
  • Compare concentrations to criteria
  • All criteria must be satisfied for Use designation
  • - Determine if recreational
  • use improvement occurs


Index WQIi



WQIagg=  (WQIi)i

water quality valuation
Water Quality Valuation
  • Benefit Transfer: Carson and Mitchell 1984 (survey), 1993 (publication):
    • National Contingent Valuation Survey (564 respondent observations)
    • Incorporates the WQ Ladder
  • Format:“What are you WTP to raise the minimum level (of WQ) to where 99% or more of freshwater bodies would be swimmable (or boatable, or fishable)?”
water quality valuation cont
Water Quality Valuation (cont)
  • Transfer Household Willingness to Pay (WTP):
    • Index Approach: $WTP = f(WQI values, income)
    • Ladder Approach: $WTP for “Use” attainment
  • Apply Fraction of WTP based on fraction of stream miles affected.
  • Allocate 2/3 of WTP to in-state improvements and 1/3 of WTP to out-of-State improvements.
water quality valuation cont1
Water Quality Valuation (cont.)


Benefits for State j = B(instate, j) + B(out-of-state, j)

WQ change = X = Boatable to fishable,

WTP(x) = WTP(fishable) – WTP(boatable)

B(in,j)= Miles(x,j)/Miles(j) * H(j) * 2/3*WTP(x)

B(out,j)= Miles(x,n)/Miles(n) * H(j) * 1/3*WTP(x)

B(x=f(ladder)) = $170 million/yr

B(x=f(index)) = $300 million/yr

other applications of method
Other Applications of Method
  • Retrospective Benefits Assessment of Water Pollution Control Programs since 1972 (1999)
  • Stormwater Phase II Final Rule
  • Meats and Poultry Products Effluent Limitations Guideline (2004)
  • Construction and Development ELG (2004)
uncertainty sensitivity analysis
Uncertainty/Sensitivity Analysis
  • Water Quality Modeling:
    • No statistical analysis for CAFO
    • Conducted Monte Carlo analysis for NWPCAM concentration predictions for Meats and Poultry Products Final Rule
  • Valuation:
    • Two approaches for valuing changes in water quality (WQI function and discrete uses) generates range of benefits
strengths of analysis
Strengths of Analysis
  • Direct estimation of Benefits (no extrapolation)
  • Aggregates multiple water quality parameters of concern for CAFO
  • Accounts for use and some nonuse values
  • Addresses marginal changes in WQ
  • Integration of national databases
  • Links environmental output and valuation data
  • WQ modeling:
    • Excludes Great Lakes, estuaries, and smaller streams
    • Limited calibration of concentration estimates (at the time)
    • Steady state stream flow assumed (e.g., no storm events)
  • Index and Use Attainment:
    • Other pollutants (toxics) not acknowledged
    • “Use criteria” and WQI curves may be dated
  • Valuation:
    • CV survey may not capture all nonuse value
    • Original WTP values based on national change
    • One-dimensional index consistent with Use classifications?
future options water quality modeling
Future Options: Water Quality Modeling
  • Considerations:
    • Integration with other models or modeling systems (other agencies)?
    • Case-studies with extrapolation vs National model?
    • Develop estuarine and Great Lakes modeling capacity within National model?
    • More calibration (partially addressed)
future options valuation
Future Options: Valuation
  • Considerations:
    • Multi-dimensional measures of water quality
      • Service classification (e.g., fishing)
      • Quality classification (e.g., high/low, sport/nonsport)
    • Scale of valuation (national vs regional vs local)
      • Example: WTP for Safe Swimming in X% of water bodies within 100 mile radius. (Harvard/Duke study)
    • Conduct rule-specific primary valuation surveys
    • Refine benefit transfer methods (e.g., meta analysis)