Analysis of trade-offs between cost minimization and equity in water quality management in agricultural watersheds
Allocation of pollution control responsibilities is an important problem in environmental economics. Previous research has developed the least-cost formulation that addresses both cost efficiency and hydrologic uncertainty. However, the least-cost formulation does not explicitly consider the distribution of pollution control responsibilities that has a serious implication on equity. A theoretical framework for evaluating the trade-offs between cost efficiency and equity is developed in this work. In this paper the efficiency equity curve that defines the cost of achieving equity is developed. It also evaluates the impacts of hydrologic variability and parameter uncertainty on the trade-off between cost efficiency and equity, and the impacts of the choice of equity criteria on phosphorus management decisions. A demonstration example is also presented that analyzed phosphorus management in the Fishtrap Creek catchment and the lower Nooksack River basin located in northwestern Washington State.