Clean Water Pays Off

Jan. 4th 2017
Lake Champlain

How much does dirty water cost? If you live along the shores of Lake Champlain, a slight decrease in the clarity of the lake could eliminate your job or reduce the value of your home by thousands of dollars. Pollutants and harmful algal blooms can cloud the lake water, discouraging tourists and seasonal home buyers from contributing to the local economy. UVM researchers analyzed five years of data from lakeside towns to determine how these changes in water clarity affect certain economic metrics. 

The researchers used Secchi disk depth – the depth at which an opaque disk lowered into the water disappears from view – as an indicator of water clarity. By comparing home values, lodging revenues, tourism expenditures, and tourism-related jobs at different Secchi disk depths between 2010 and 2014, they were able to translate water clarity into monetary values. They also modeled the economic repercussions of future scenarios when the lake water might be more clear (if the amount of phosphorus entering the lake is reduced in accordance with Total Maximum Daily Load (TMDL) regulations) or less clear (if climate change accelerates the input of phosphorus to the lake). 

As the table below illustrates, incremental changes in water clarity can have striking consequences for the lakeside economy. A one-meter decrease in Secchi disk depth could lead to nearly $17 million in economic loss within the Lake Champlain Basin. Clear water in the lake is worth every penny – and it pays back.

Metric Value Result
Water Clarity +1m Secchi disk depth

+3% single family home value

+37% seasonal home value

+$2,303 per lodging unit in lakeside towns

+10% (+$110,544) in lodging expenditures

in August at five-town scale

Water Clarity -1m Secchi disk depth

-195 full time equivalent jobs

-$12.6 million in tourism expenditures

-$71,721 in lodging revenues across six lakeside towns

-$16.8 million in total economic reduction

Reduced Phosphorus Loading

Due to TMDL Implementation

-34% ≈ +1.67m Secchi disk depth

+$15,200 single family home selling price

+$61,000 seasonal home price increase

Increased Phosphorus Loading

Due to Climate Change

+29.6% ≈ -0.773m Secchi disk depth

-$7,000 single family home selling price

-$53,000 seasonal home selling price

Lake-Related Tourism Activity/Labor +$1 spent

+$0.57 generated in labor income

and induced impacts

+$0.62 generated in value-added profits

+$0.60 generated in total regional output

New Jobs Related to Lake Tourism Economy +1 +0.4 jobs to support indirect/induced activities

Annual Tourism Expenditures

in Four Lakeside Counties

$300 million

$72.75 million in spending generated

1,070 jobs created