In cases of adverse events, we are all tempted to measure the maginitude of the damages by calculating teh cost of clean-up...
Columbus has spent $723,000 to get rid of the rotten taste and smell in drinking water caused by toxic algae at Hoover Reservoir.
Toledo spent $3 million last summer to keep Lake Erie’s toxic algae out of the city’s drinking water. Dozens of water-treatment plants along Erie are in the same boat.
And in western Ohio, the city of Celina spends about $450,000 a year on problems at Grand Lake St. Marys, which has become the poster child for the state’s algae problems.
Cyanobacteria, or blue-green algae, grow thick in Lake Erie, Grand Lake and other inland lakes each summer, feeding on phosphorus from manure that rain washes off farm fields. The algae can produce liver and nerve toxins that threaten people, pets and wildlife.
Columbus is just the most-recent city to have to battle the issue with dollars.
...which is fine for accounting purposes, but such costs have little relationship to the true economic costs of the adverse event. The true economic cost of an adverse event is the amount of money consumers would be willing to give up to restore their well-being to what it was prior to the event. For example, one way to measure the economic cost of damages to drinking water supplies might be to calculate the increase in consumer expenditures on bottled water during such events. While not a full measure of economic cost, the change in expenditures to avert the damages reflects the willingness to pay, thus the monetized value of the change in well-being, on the part of consumers. We call this method of measuring damages the Defensive Expenditure method, or the Averting Behavior method.
As for the title of the post...
In 2012, algae toxins were detected in the raw water at 13 treatment plants, including those in Toledo, Celina, Lake County, Findlay, Lima and Clermont County. None of the toxins contaminated treated drinking water.
State efforts to combat the algae have focused on reducing the flow of phosphorus to streams from farms, which are considered the prime contributors to Lake Erie and Grand Lake St.
Marys. Farmers near Grand Lake St. Marys are required to monitor and limit the amount of manure they spread on fields. Phosphorus-reduction efforts are voluntary elsewhere.
In September, Lake Erie algae toxins overloaded the Carroll Water and Sewer District treatment plant in Ottawa County.The plant was the first in Ohio to post an algae-related “do not drink or cook” warning. The ban, which affected 2,000 customers, lasted two days.
Carroll Township paid $125,000 for a treatment system. Henry Biggert, water-district superintendent, said the new system will destroy all toxins and other compounds that create odor and taste problems.
Celina’s system was installed in 1995 to eliminate toxic algae. Water superintendent Mike Sudman said that before the system was in place, drinking water tasted like “licking a carp straight out of the tap.”