Estimation of Economic Losses to the Agricultural Sector from Airborne Residuals in the Ohio River Basin Region

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Abstract
This paper reports the results of research conducted for the U.S. Environmental Protection Agency in connection with the Ohio River Basin Energy Study (U.S.-EPA Grant No. 805585, Subcontract No. R805588). The purpose of the research is to estimate monetary losses to agricultural producers in the study region from airborne residuals. Estimates of physical crop losses were provided under the direction of Dr. Orie Loucks at The Institute of Ecology and were used for estimating the related monetary losses. Economic losses are defined as producer surplus losses to the agricultural sector due to reductions in productivity from airborne residuals. Research results support the following general conclusions; monetary losses to agricultural producers in the region are on the order of 12% of the present discounted value of clean air production through the year 2000. Losses from utilities alone are on the order of 4.8%. Losses are highly concentrated in the ORBES portions of Illinois, Indiana, and Ohio and primarily related to soybean and corn production. The overwhelming monetary losses are attributable to O3 concentrations in the region. Compliance and noncompliance with state implementation plans (SIP) does not significantly change the degree of monetary losses. Only high growth in electric demand produces annual losses which rise to the year 2000 and produces significantly greater losses among alternative scenarios.

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