MSU RETURNING MATERIALS: PIace in book drop to LIBRARJES- remove this checkout from n your record. FINES will be charged if book is returned after the date stamped below. ‘r‘,’ 5"" ‘ 7:, 5? f7 1r 3 I) H E 1 if m figfl‘h“. :152 6 3 q“ 1 153”", ' ' ,.. .1331 ’é‘o‘k‘ " m : 2 FEB 0 7 1994 AN ANALYSIS OF SELECTED POLICY ALTERNATIVES TO ALLEVIATE GROUNDWATER CONTAMINATION IN MICHIGAN By Jessica Trumbull Kovan A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1986 ,9. .3" 7 7/ 3» ABSTRACT AN ANALYSIS OF SELECTED POLICY ALTERNATIVES TO ALLEVIATE GROUNDWATER CONTAMINATION IN MICHIGAN By Jessica Trumbull Kovan Approximately 50% of Michigan residents depend upon groundwater as a source of clean drinking water. Contamina- tion of this resource is putting individual health in increas- ing jeopardy. As pollution occurs, groundwater quality becomes a policy problem as society seeks protection from health and environmental consequences. The broad objective of this research is to establish the interdependencies creating the contamination and to compare alternative policy measures to decrease contamination in Michigan. The study identifies the general institutional setting for groundwater policy. Nitrate contamination from nitrogen fertilizers is specifically researched. Water rights are discussed and local, state, and federal roles in protecting groundwater are described and evaluated. Various policy alternatives are examined for their effects upon changing the individual behavior creating pollution. Montcalm County, Michigan is used as a case study for policy analysis. ACKNOWLEDGEMENTS I would like to thank several individuals who have greatly contributed their time, criticisms, and support to this research project. My utmost appreciation goes to Dr. Larry Libby who proved to be an invaluable thesis advisor, lending both criticism and friendship in times of need. The other members of my thesis committee also deserve a word of thanks, Dr. Allan Schmid for his thought provoking assistance through- out my program, and Dr. Jon Bartholic, for his useful input. 1 also wish to thank my friends and family who kept me sane and brought me smiles throughout this project. I especially must footnote my office mate whose friendship brought a spark to every day. Finally, a special thanks and hug to Jeff who shared the ups and downs of my master's program, always with encouragement and enthusiasm. iii Iv--—uh__._- TABLE OF CONTENTS LIST OF FIGURES ..... ............ . ...... ....... ....... CHAPTER ONE: INTRODUCTION ... ........................ 1.1 The Groundwater Resource ... ...... . .............. 1.2 The Use of Groundwater ..... .. ......... . ...... 1.3 Groundwater Quality in Michigan ... .............. 1.4 Study Objectives ............... ........... . ..... 1.5 Overview of Thesis ...... ........ ....... ......... CHAPTER TWO: GROUNDWATER CONTAMINATION .............. 2.1 Physical Characteristics of Contamination ....... 2.2 Nitrate Contamination of Groundwater . ........... 2.3 Externalities and Policy ............. ...... ..... 2.4 Uncertainty and Risk .. .......................... 2.5 Conclusion ...... .................. .............. CHAPTER THREE: INSTITUTIONAL SETTING FOR GROUNDWATER POLICY .... ........ . ...... 3.1 Rights to Groundwater ................... ........ 3.2 Local Government Role in Groundwater Policy ..... 3.3 State of Michigan Role in Groundwater Protection ............ ............... .......... a. Michigan Acts Affecting Groundwater .......... b. Administration of Water Rights ......... ...... 3.4 Federal Role in Groundwater Protection ... ....... a. Federal Groundwater Protection Strategy ...... b. Federal Authority ............................ 3.5 Unresolved Issues .... ..... ........... ........... CHAPTER FOUR: CONCEPTUAL FRAMEWORK FOR PREDICTING THE PERFORMANCE OF ALTERNATIVE GROUNDWATER INSTITUTIONS ..................... ..... 4.1 The Situation-Structure-Performance Paradigm 4.2 Situation ... ..... .......... .. ......... ........ 4.3 Situational Characteristics of Groundwater ...... 4.4 Structure ........................ ..... .......... 4.5 Institutional Structure of Groundwater Use ...... 4.6 Performance . ...... ................. ...... . ...... Page vi mflmbN 10 10 13 17 21 23 24 24 27 29 32 33 36 38 39 44 47 47 50 51 56 59 62 4.7 Groundwater Quality Performance .... ............ CHAPTER FIVE: POLICY ALTERNATIVES AND 0101 (DUI 5. NH #0.) 5 RECOMMENDATIONS ...................... The Role of Groundwater Policy ................. Groundwater Quality Policy Alternatives . ....... a. Public Sells Right, Farmer Buys ....... ..... b. Public Sells Right, Farmer Unwilling Buyer c. Public Unwilling Seller .......... . ..... ..... d. Farmer Sells Right, Public Buys .. ........... e. Farmer Unwilling Seller, Public Buys Right Education ................ ...................... Recommendations ........... ......... ....... ..... a. Regional Land-use Planning .................. b. Cross-compliance: Groundwater Reserve and Groundwater Buster Programs ...... ........... Summary .. ...................................... CHAPTER SIX: APPLICATION: MONTCALM COUNTY, CHAPTER SEVEN: SUMMARY AND CONCLUSIONS ............. 7. BIBLIOGRAPHY 010301030) mbOJN'" 1 MICHIGAN .............................. Montcalm County ...... ............. . ............ Institutional Setting .......................... Analyzing the Situation ........................ Suggestions ... ............. . ................... Montcalm County Conclusions .................... Summary .... .................................... 7.2 Recommendations for Future Research 69 69 71 74 80 81 83 86 88 89 91 93 103 105 105 118 121 124 131 133 133 136 139 Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure LIST OF FIGURES The Water Cycle ... ......... . ........ Potential Groundwater Contamination Sites in Michigan ... ..... ...... ..... The Nitrogen Cycle in Soil .......... Major State Laws Affecting Groundwater ............ ............. Major Federal Laws Affecting Groundwater ........... ......... .. SSP Applied to Groundwater Contamination .................... Alternative Rules of Ownership Map of Michigan, Highlighting Montcalm County ....... ....... Aquifer Vulnerability: Montcalm county ......OOOOOOOOOIOCO...0.... General Soil Map: Montcalm County Groundwater Nitrate 1933-1970: Montcalm County .................. Groundwater Nitrate 1971-1974: Montcalm County .... ................. Groundwater Nitrate 1975-1984: Montcalm County .... ................. Landuse/Cover: Montcalm County ...... vi 16 31 40 68 73 106 108 110 111 112 113 114 .‘V‘FA "' ’ mini: ..IITJ'L 5—_ JIL-I: I-L-E’: ":1 CHAPTER 1 INTRODUCTION Clean drinking water is necessary for a healthy life. Within the United States the contamination of groundwater and surface water is a growing concern. Approximately 50% of the total population gets its primary source of drinking water from groundwater. This dependence is even greater in rural areas where over 85% of the residents rely upon ground- water (CAST, 1985, p.7). It is an essential natural resource for the well-being of the nation. It is being discovered with considerable frequency that groundwater, like other natural resources, is vulnerable to the activities of mankind. These actions are making the water unusable by affecting its quality. As the public is becoming increasingly more aware and concerned, this environ- mental challenge must be met. Yet, the nature of the re- source, being both buried and hidden, makes the identification and investigation of the problems of pollution extremely complex. In addition, the clean-up of contaminants can be exorbitantly expensive. As the occurrence of groundwater contamination is growing, the health of the nation is increasingly under peril. In order to try to alter this consequence, one must clearly 1 2 undePStand the physical, economic, and institutional elements of groundwater contamination. Only then can steps be taken to alleviate the pollution. 1.1 The Groundwater Resource Groundwater, in general, is simply the water that fills the spaces between the particles of soil and rock under the land surface. Water and air combine to fill the pore spaces closer to the surface with soil water, which form the area known as the zone of aeration (Pye et al, 1983). At the point where the pore spaces become completely filled with water the zone of saturation is established. The upper most part of this zone is considered the water table, while saturated levels beneath the water table consist of groundwater. The level from which groundwater can be economically withdrawn is known as the aquifer (Pye et al, 1983). Groundwater moves very slowly, both vertically and later- ally. The force of gravity will move groundwater from higher to lower areas. The flow, which is considerably slower than that of surface water, may be measured in inches per day or feet per year. The speed and amount of water moving through the soil depends on the type of soil or rock which makes up the formation. The porosity of the soil, the amount of water that a soil formation can hold, is determined by the amount of pore space in the composition. Thus, coarse-grained sediments such as sand and gravel permit the most rapid movement while 3 fifie-grained sediments, clayaand silts, allow slower movement (CAST, 1985). Groundwater is part of the flow system which moves from recharge areas to discharge areas (See Figure 1.1). Recharge areas are those areas where a significant amount of ground- water is added to the aquifen The place where groundwater is removed, such as rivers and streams, is considered the discharge area. Thus an aquifer, which has a large amount of porosity and permeability, n capable of transferring signi- ficant amounts of water to the discharge point. There are two classificafions of aquifers: unconfined and confined. An unconfined aquifer is located near the land Figure 1.13 The Water Cycle. Source: Tri-County Regional Planning Commission Implementa- tion of Local Groundwater ReChar e Area Mana ement Strate : An Administrative Guide, Lansing, MI, 1934. a surface with its upper boundary being the water table. Confined aquifers are found further beneath the surface. Below and above the confined aquifer are impermeable layers of bedrock constantly keeping the water under pressure (DNR, undated). Hence, an aquifer may be just below the surface of the land or can be hundreds of feet down. Its size can vary from a few acres to thousands of square miles. Due to the fact that it collects in large aquifers, the right of access for the individual using the resource has to be clearly defined. 1.2 The Use of Groundwater Groundwater in the United States is often more readily available than surface water. As stated previously, estima- tions suggest approximately 50% of the United States popula- tion utilizes groundwater as its primary source of drinking water (CAST, 1985, p.7). Of the total population in the U.S. served by groundwater, 36% of the water is for municipal use and 95% of the rural population is dependent upon the water for drinking purposes. Approximately 86% of the total water resource in the U.S. is in groundwater aquifers (CAST, 1985, p.7). Western states are the main users of groundwater. The dependence upon groundwater as a drinking water source is significantly less for the eastern United States where the atmosphere is more humid (CAST, 1985). Trends show an increase in groundwater usage as a percen- tage of entire withdrawals. The total use in 1970 was 68 5 billiCHW gallons per day (bgd), which increased to 88.5 bgd by l980. Agricultural irrigation accounts for the largest percentage of this increase (DiNovo & Jaffe, 1984). The percentage used by public, rural and industrial sectors actually decreased during this time period. In 1985, of the entire groundwater demanded, 68% was used for irrigation of cropland (CAST, 1985, p.7). The physical properties of groundwater, in conjunction with its increasing usage, deems groundwater as an important economic resource. 1-3 Groundwater Quality in Michigan In Michigan, a state surrounded by the Great Lakes, approximately half of the residents depend on groundwater as a source of drinking water (DNR, undated, p.1). Groundwater supplies 17% of public water supplies and nearly 100% of the domestic water supplies in Michigan (Bedell, 1982, p.43). The water is also heavily used in agriculture and industry. Irrigation withdraws 37% of the total water used from ground- water (Bedell & VanTil, 1979, p.37). Many government publica- tions emphasize that groundwater is one of Michigan's most valuable resources (DNR, undated: DNR, 1985a). However, as of .« July 1985, over 1000 contamination sites have been identified, ~(and the number increases monthly (DNR, 1985a, p.1). See Figure 1.2. As is true in much of the U.S., Michigan poorly understands .this water resource. Information within the state on ground- gwater geology, quantity, and quality is diffuse and inadequate t 1500 Ill-:22- Landlills and Dumps t 3390 Groundwater Dischargers t 2.990 Sites Storing and Handling Critical Materials 1 14.200 Manufacturing Sites 2 - —3+160 Transportation Spills .000 t $090 Gasoline Stations 23.890 Miscellaneous - +20.000 Abandoned Wells and Exploratory Borings - +16.000 Producible Oil and Gas Wells - +1.000.000 Residential Septic Systems ---------------- 5.000 10.000 15.000 1 Significance of individual sites generally decreased from top to bottom 2 Actual spill sites 3 Total miles of highways. railways. pipelines and sewers. Figure 1.2: Potential Groundwater Contamination Sites in Michigan.‘ Source: Michigan Department of Natural Resources, Assessment of Groundwater Contamination: Inventory of Sitgg. (July 1982) (DNR, 1985a). Legislative guidelines mandating the use of the water are a pot-pourri of laws which give a minimum of directives over the resource (MSU, 1985). Hence, due to the small amount of knowledge and jurisdiction of activites affecting groundwater, contamination is an area of growing concern within the state. This research aims at providing an understanding to the institutional context of the water 7 resource in Michigan, thus providing policy suggestions to alleViating the contamination episodes. 1.4 Study Objectives The broad approach to be taken within this study will be to analyze and compare policy choices for the reduction of groundwater contamination through the use of an institutional framework. The type of paradigm used allows the researcher to study the problem by reviewing the situation, structure, and performance surrounding groundwater. This study concentrates largely on the particular conse- quences which influence the behavior of community members. These variables include (1) the external environment: (2) the organizational structure: and (3) individual perceptions and preferences. Special emphasis of this research is upon the contamination of groundwater from nitrogen fertilizers, as investigated through a political-economic perspective. The study's objectives are: (1) To establish the relationships between particular situtation, structure, and performance sets within the policy context of groundwater contamination from nitrogen fertilizer. (2) To compare alternative policy measures which could be established in Michigan to alter the contamina- tion levels and to predict what performance can be expected from these alternatives. (3) To use a case study to theoretically test the policy alternatives recommended and to analyze what the results would be for that region. 1. 5 Overview of the Thesis In many areas of the United States nitrate levels in groundwater are exceeding the standards set for ”safe" drinking water. There are economic and social reasons this is occurring, and with the existing institutional structure the contamination episodes are increasing. The central concern of this study is to what extent changes made in Michigan's existing institutional structure could alter the contaminating behavior of the participants, thus creating an environment in which to reduce the contamination now occurring. Chapter Two examines the nature of the water quality problem. The physical characteristics of contamination are reviewed, specifically concentrating on how nitrogen fertil- izers are a source of groundwater pollution. The discussion of contamination emphasizes the externality aspect of pollu- tion, as well as the issue of risk and uncertainty. Chapter Three focuses on the general institutional setting for groundwater policy. Water rights are discussed and local, state, and federal roles in protecting groundwater are described and evaluated. Michigan's institutional framework is the basis for this discussion. Chapter Four examines the conceptual framework used as an analytical tool within this research. The framework is then applied to the groundwater resource for analytical purposes. The situation, structure, and performance of the resource is investigated in detail. 9 Chapter Five examines various policy alternatives for maintaining groundwater quality and how they can alter the consequence of pollution. Empirical evidence and perfor- mance information is discussed in regards to each of these alternatives. The conceptual framework is then applied to one proposal for decreasing groundwater contamination. Chapter Six applies a case study, using Montcalm County in Michigan, to the policy analysis. This region is focused upon in order to provide a working example for applying the conceptual framework to a particular region. Chapter Seven presents the study's summary and conclusions. Chapter 2 GROUNDWATER CONTAMINATION From all parts of the country incidents of groundwater contamination are being reported and verified. This chapter reviews the physical characteristics of contamination, with special emphasis on nitrate contamination, contamination as an externatility, and the uncertainty and risk involved with groundwater pollution. 2.1 Physical Characteristics of Contamination Within this analysis, groundwater contamination will be defined as the addition to water of elements, compounds, or pathogens that alter its composition (Pye et al, 1983, p.49). Pollution occurs when the concentration of contaminants alters the water to a point where it is "unfit" for present and future uses. This may result as a consequence of physical and/or economic reasons and is directly related to how the water is being used. It may be too costly to overcome the quality problems, the individual or society may not be willing to pay the high price. The benefits of obtaining clean water may not exceed the costs involved. The declaration of water being ”unfit” will vary and is based on a variety of uncer- tainty issues. 10 11 GPCHJndwater contamination occurs underground and out-of- sight. which creates a major difficulty for detection. Sources of pollution are not readily observed and too often the contamination goes unnoticed until the damage is economic- ally or technically irreversible. The actual tangible effects of contamination are visible long after the incident which caused the pollution. Thus, long time lags between occurrence and detection become a major impediment. A large variety of compounds, both natural and man-made, are the constituents of groundwater pollution. The pollutants will usually enter the groundwater system from the surface of the land, thus percolating downward into the aquifer. Plant roots, small microorganisms, and other biological processes may remove a fraction of the contaminants, the amount being dependent upon the type of pollutant (Pye et al, 1983). Once in the aquifer, the movement of the pollutant is affected by both its density and its solubility in water. Movement within the aquifer is generally very slow. The rate can vary from a fraction of an inch to a few feet per day. Dispersion over time will cause a spreading of the contaminant in a particular flow pattern. The solute will continue to flow with the groundwater until it eventually reaches a point of discharge (Pye et al, 1983). Thus, unlike surface water, very little dilution of the contaminants takes place in groundwater. There are three main categories which encompass the differ- ent sources of groundwater contamination. These include (1) natural pollution: (2) waste-disposal practices: and (3) non- 12 diSPOSEI sources due to man's activities. A variety of factors affect the degree to which the contaminant will pose a threat and become a concern within the population. These include the concentration of the contaminant, its level of toxicity, the amount of groundwater affected, the hydrological conditions, how the groundwater is used, the population affected by the use, and the available alternative water supplies (Pye et al, 1983). This analysis focuses upon the third category of sources of contamination, nonpoint sources, with special emphasis on agricultural activities. Agriculture is coming to the fore- front as a prominent nonpoint source of groundwater contamina- tion.‘ The major increase in usage of agricultural chemicals over the last 20 years is believed to have had large effects on the increasing levels of nitrates found in groundwater (Porter, 1977). The increased use of irrigation, pesticides, fertilizers, and changes in vegetative cover have all affected the quality of groundwater. Consequently, contamination is occurring as a residual of production practices. In discus- sion of the economics of contamination this becomes an important factor, along with the physical characteristics of the pollutant, the technological aspects, human health consequences, and the inevitable risk factor. ‘ Nonpoint source contaminants are defined as those (1) generated by diffuse land use activities, not identifiable facilities: (2) conveyed to groundwater and surface water through natural processes rather than by deliberately con- trolled discharge: and (3) not susceptible to ”end of pipe” treatment, but controllable by changes in land management or process practices (CES, Jan. 1985, p.7). . ' v f (“EJ‘F‘W .fi' m_ .',;.;“‘5_--.'.-. ’5." i. “'1‘- ‘2'! 4 13 2.2’ I‘itrate Contamination of Groundwater Nitrate found in groundwater in high concentration is the specific pollutant focused upon in this research. The large growth in use of nitrogen fertilizers after WWII is being correlated to the increasing concentration of nitrate levels found in plants and groundwater. Several studies have confirmed the linkage between nitrogen (N) fertilizers and groundwater contamination at sites throughout the U.S. (Olson, 1985). With the confirmation of direct correlation between fertilizers and nitrate levels the E.P.A., as well as a conglomeration of regional, state, and individual research projects, has begun investigating this pollution problem. The generation of concern has prompted some states to introduce bills to legislate controls on the use of N fertilizer (Olson, 1985). The public knowledge concerning the problems which exist between N fertilizer and the environment is increasing. The nitrogen found in crops is derived almost entirely from inorganic forms: principally nitrate, ammonium, and gaseous nitrogen. The general behavior of nitrogen found in the environment is complicated. It occurs in many areas within nature: the atmosphere, plants, animals, humans, soils, minerals, surface water, and groundwater. Most of the nitrogen in soils and organic residues is present in organic forms, which transformed by microorganisms create nitrates. The microorganisms then release nitrogen in inorganic forms into the environment. The initial form of nitrogen released is ammonium. From ammonium, nitrate is produced in a separate rm:- 14 m16T°bimalogical process of decomposition called nitrification (CAST, 1985). The foremost recognized problem of the use of fertil- izer N is how the excessive nitrates which accumulate in vegetables, forages, and groundwater affect the health of the population. Case histories have shown nitrate poisoning of livestock which have consumed forage high in nitrate. Plants which have been killed for a variety of reasons continue to absorb nitrate for a period of time without assimilating the nitrogen. Thus, the animal consuming the forage may die due to the excess of nitrates within the plant (Garner, 1958). For citizens, especially in the rural sectors, nitrate accumulation in groundwater can have negative health implica- tions. The primary illness occurring from drinking water containing large levels of nitrates is that of methemoglobine- mia (Olson, 1985). However, gastric cancer, nervous system impairment and birth defects have also been connected with excess nitrates (Olson, 1985). Methemoglobinemia is largely a problem with infants, especially a child suffering from diar- rhea. Contraction of this illness can result in the ‘blue baby’ syndrome: death from asphyxiation. The incidence of this malady has not been recorded in the U.S. due to the fact that the disease does not have to be reported to public health authorities (Pye et al, 1983). Another health hazard arising from the ingestion of excess nitrate is the possibility of contracting carcinogenic nitrosamines, a type of cancer (NAS, 1977, 1981). However, it must be noted that not all users of _ in a 1—-—,—-_ 15 contaminated groundwater will become ill. A risk factor concerning the probability of developing negative side effects from drinking high concentrations of nitrates is a large element in the policy process. There are three major sources of nitrate in groundwater: animal wastes, sewage sludge, and nitrogen fertilizers (Pye et al, 1983). The greatest potential for pollution exists with the latter of the three (Olson, 1985). Fertilizers are used as a chemical supplement to soils to increase plant growth. Yet, plants will only absorb part of each of the nutrients which are presented in soluble forms. As the amount of nutrients in the soil water increases, leading to greater crop yields, the percentage of the total amount absorbed by the plant decreases (Olson, 1985). Fertilizers continually added to the land result in greater residue of the nutrients in the soils and, hence, the loss of a greater amount to the ground- water is possible. See Figure 2.1. Nitrogen contained in fertilizers far exceeds that of other nutrients, for most crops remove larger amounts of nitrogen than any other fertilizer element (CAST, 1985). These fertilizers contain nitrates, ammonium, or compounds which are easily converted to ammonium. Under favorable conditions of moisture, temperature and oxygen supply, the process of nitrification is enhanced. Thus, the potential for loss of nitrate to groundwater is increased when relative- ly large amounts of nitrogen fertilizers are added (CAST, 1985). Freeze and Cherry (1979) state that nitrates are the ; .I I!_’ I" . W ,2 -: l : ...,“ 7 T I j ..s, . ;' ""‘"C:5 w ‘J . a “v: :‘V‘AL-ri/Qé' 3 “.‘3’."N °'o; . ‘ \- . F‘—‘-‘—_""z". ’2'; eun- azsbus-up ;, gm Mm mm mm .. menus: [we SSP“: it: Eva i . (f.- . 50L cmcum'u 53:4 5! Com-MN AMMONIUM or. :1 exam airman! :, . c'd . [If :11 act-acute fi-g_‘_ m mu converts: . I muouluu. ,3 , .--G I A ’4“ m: ulna-«v- 9.4””, so muculun. 1V: 3 _, . .' , .‘fl I Vtwl l‘n ‘ d . .. .‘II got ‘41. 1nd- ~-19",:’1,2a:=- ’ 05C; 6 A _‘ A . a. e ' co ‘0 1 PV" .1. C ’, ;_€7;‘ .4,-‘.A.nj’:,.§j Micaccmoms soul/mm: {’70, '7447- f, - a: I A 13%;},3 2,10 fa ‘ ”1,3“:- Ammuurommmawm "r— ',.“: ,‘fia. ' l'. i‘.’-.'-’ ‘ J/‘ . ; -' fix-7": .l amass—alas u-mmanon.“’l.’."">c‘ '- 4 a 7 . ’3 a 7 g I . ‘1 a— of r0 5 ' '.’A"‘~’" V’ -r-—,"\1"A-'-,- 4v ., " a ’9 as» l ;___.-,.,.. :2,’ i,.~--. ' . 0a I f: _ A , L- v G: San: rmuzsu <3 . . 1o- 3671‘ “we anemon- nlo All ° " ‘3. '. l6xifiM-s wens «unseat {fl CAM as New or 31 7‘1 :20? '1 lelfi‘l’! 3 SUB-36¢? T3 IJKHINO , _ imp w: swell. up maewm i. .12; Mair-:23. mwmm I‘ .. can: .~ senor zit-5. . ' ."V'ffi' IF 4 no; mime rare-4 , ' .j 8 :switr, Mn'uw: wu move u: 1"" MN!”35¢;~‘M..‘ -~+~fi~93; . a i I; NIT‘MI'! mm m rat. I).- wmmmlanDL. j ”Pawn wuwlren. [’ _.—._______ , . . l. ‘0 .5' ... ' ..'..'5. ,- Figure 2.1: The Nitrogen Cycle Source: Cooperative Extension Service, Nitrogen Fertilizer Mana ement: For Efficient Cro Production and Water ualit Preservation, Michigan State University, Extension Bulletin WQO7, August 1985. mvwv ,-. .... :t'T‘r' 17 most Common contaminant found in aquifer systems, and it has been shown that agricultural activities are the largest source of increased nitrate levels in groundwater (Madison & Brunett, 1984). The type of soil is also a factor in the amount of nitrates found in the groundwater system. Very sandy soils are the most susceptible to nitrate leaching. Groundwater contamina- tion appears more rapidly if the groundwater is shallow. However, the most important factor for contamination is the sandy nature of the soils and the underlying material (Olson, 1985). Irrigated sandy soils are more likely to move the nitrates through the soils, especially when water is being applied during the growing season. There are a number of sources of inorganic nitrogen found in groundwater, with fertilizer N in many cases a large contributor. Studies show that many major agricultural states use more N fertilizer annually than is consumed by the crops produced, leading to an excess amount of nitrates in the environment (Olson, 1974: Pye et al, 1983). III health effects for humans may result. 2.3 Externalities and Policy The economics of pollution have been discussed frequently in welfare economics literature and can be applied to ground- water contamination. The concept of externalities arises as one recognizes that the behavior and choices of each indivi- dual impact upon the choices open to others. Those injuries 18 and benefits, or costs and gains, placed upon various indivi- duals by the decisions made by others are the externalities incurred (Samuels and Schmid, 1981). How an externality is viewed by society will symbolize whose interests are being promoted by policy decisions. Water pollution is a common example of when the effects of an activity are not accounted for within market transactions: costs are imposed upon individuals not involved in the transactions. The external cost which is most prevalent in the public's eye is the health risk posed to those who consume the contaminated water. When these risks are not passed onto the individual or firm who is causing the pollution the waste will continue to contaminate the water supply, for water provides an inexpensive disposal site. As an example, a chemical industry releasing toxic chemi- cals into a river is affecting the well being of others, yet this is outside of traditional market channels. The industry, as a profit maximizing firm, has chosen the level of output where price equals marginal cost and cost does not include damage imposed on others or the cost of "adequately" restoring the water quality. The cost of pollution is imposed upon the individuals downriver from the plant, even though they are not part of the market transactions. Thus, societal preferences are not being reflected in the price, for the information being relayed by the price is an inaccurate reflection of demand by the general public (Nicholson, 1985). The private versus social demand for the goods differ. Pollution occurs, 0F Ill Iha Sho more 19 as the marginal benefits of disposing the waste exceed the marginal costs borne by the polluter (Randall, 1981). It becomes evident that almost any activity involves an externality, where one individual is influenced by the decisions of another. It has been deemed necessary within welfare economics to differentiate varying types of external- ities. A relevant externality occurs when the affected party has the desire to change the behavior of the individual creating the pollution. Thus, an externality becomes relevant when the individual affected by the activity is not indiffer- ent to it (Randall, 1981). Furthermore, there are situations involving externalities where it is possible to modify the activities of the acting party such that the affected party will be better-off without making the polluter worse off. This is labeled a Pareto-relevant externgjity (Randall, 1981). However, differing slightly from the definition imposed by welfare economics, it can be argued that policy solutions to externalities inevitably impose externalities of their own (Samuels & Schmid, 1981). Thus, the real issue is the role that all externalities play in structuring individual opportunity sets. Externalities are linked to the definition of property rights: who will bear the cost of the waste disposed into the river? Furubotn and Pejovich state, "The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A? The problem is to avoid the more serious harm" (1972, p.1142). How these rights are m: V .1 .gr tr -: m .. 1"" ..l 20 assigned will affect the outcome of decreasing or increasing contamination. The externality will be associated with the costs of defining, exchanging, policing, or enforcing the property right (Furubotn and Pejovich, 1972). Demetz states, "property rights convey the right to benefit or harm oneself or others. ... It is clear, then, that property rights specify how persons may be benefited and harmed, and, therefore, who must pay whom to modify the actions taken by persons. The recognition of this leads easily to the close relationship between property rights and externalities" (1967, p.347). It can be inherently difficult to assess the external costs and gains imposed by a policy decision. In the case of groundwater contamination assessing the costs of damage is extremely difficult due to the degree of uncertainty in- volved. What is important, as a policy analyst, is to recognize the choices of society in defining property rights and externalities. Policy tools can be used to redistribute property rights and thus costs for the resource. Samuels argues, "It is impossible to eliminate all externalities: rather it is necesary to evaluate and choose between external- ities, which choice will itself involve externalities. The problem is ultimately a distributional one: whose interests are to count, whose to be sacrificed, and who is to decide?@ (Samuels and Schmid, 1981, p.125). Chapters Four and Five of this research identify the critical variables and alternatives within groundwater policy which will affect how choices are 21 made by society in regards to property rights and externali- ties. 2.4 Uncertainty and Risk An important attribute of groundwater is the uncertainty which encompasses alternative uses. The future is inherently uncertain and when long time lags are involved this becomes an important factor. The possibility always exists that the use of the water will deplete the resource and pollute the water causing harm to those using it. Thus, it can never be exactly known what the demand for groundwater will be in the future nor what the supply will be. Changes in technology may alter the demand and supply characteristics as well as change the factors leading to pollution. The questions that arise with particular uses, such as whether pollution would be identified, where it will occur, and to what extent it will harmful for human consumption will alter the economic value of the resource, and the supply and demand. At this time not enough is known to determine safe pollution levels for a large number of potential contaminants, thus it can be argued public health is constantly in jeopardy (Conservation Foundation, 1981). Long-range effects of drinking contaminated water are uncertain, especially as nitrates combine with pesticide residuals and other chemicals found in the groundwater. The effects may not be evident for decades after exposure. This has occured in other areas of uncertainty, such as cigarette smoking. Three generations of 22 Americans were smoking cigarettes before the connection between cigarettes and lung cancer became clear (Fruhling, 1986, p.32). Richard Kelly of the Iowa Department of Natural Resources states about groundwater contamination, ”If the chemicals prove to be carcinogenic, what we have done is to put an entire population at risk" (Fruhling, 1986, p.32). These gaps in the understanding of the physical and economic aspects of groundwater are possibly more important in this situation than for conventional commodities due to the imperfect information concerning the risk of future uses of the water (Stiglitz, 1968). How people use the resource will depend on their perceptions of the uncertainty and risk. These perceptions strongly affect individual behavior towards the resource and each other. Conflicts will be intensified when the uncertainty about irreversibility arises and differ- ent risk preferences are confronted. Not all inviduals are affected by risk in their lives equally. There are three elements to the amount of risk an individual faces: (1) how land use activities will affect the groundwater: (2) how an individual's health is impacted by contamination: and (3) the type of risk preferences an individual has. Thus, contamination episodes will impact community members in varying manners. Two neighbors who have both been warned that particular irrigation activities will likely contaminate their wells may react differently. One neighbor continues the polluting practices while drinking the well water, the other immediately stops the polluting activity Fry—v— »?ar; ‘ .." V M -nv:- law sat bio 23 and also buys bottled water. The two people have reacted differently in the face of risk. Knowledge of this variable is essential in establishing policy emphasis, for groundwater quality is more important to some individuals than others. 2.5 Conclusion Reviewing the general characteristics of groundwater illustrates the difficulties in managing the resource to the satisfaction of all members of society. The physical, biological, economic, social, and institutional conditions of groundwater all affect the public when the groundwater becomes contaminated. How the interactions of these conditions affect society will determine the extent to which groundwater quality becomes a policy problem. Chapter 3 INSTITUTIONAL SETTING FOR GROUNDWATER POLICY Groundwater management has been very slow to develop. This is due in part to the expense of obtaining knowledge about groundwater and also to the fact that it is out of sight. Public awareness of groundwater in the United States began in the 1800's as the population expanded westward and the need for tapping groundwater increased. As the demand grew the need for policy arose. Slowly a system of private rights has evolved to deal with management controversies. The purpose of this chapter is to review the institutional setting which governs decisions concerning groundwater quality. Current public policy is based on the rights to groundwater and the linkages of local, state, and federal decision making powers. 3.1 Rights to Groundwater In the United States two main doctrines of water rights have developed: the riparian doctrine and the doctrine of prior appropriation. These were specifically developed to apply to surface water but are now also being adapted to groundwater. Michigan employs the riparian doctrine which, in the case of surface water, grants water rights to those 24 W up. ‘34 z~ ’.;'r" V w ~-I em 3" de it. Un th Pe. El‘c Hat Pia 25 individuals who own land adjacent to a watercourse. The riparian doctrine originated from English common law guaran- teeing that water owned by the riparian would not be diminish- ed in either quantity or quality. This has been modified in the United States to include the rule of reasonable use, which permits some change in quantity or quality if the diminishment is deemed reasonable (Meyers and Tarlock, 1980). For groundwater, the rule of reasonable use grants restric- ted rights to the overlying landowner. The water must be put to purposes of beneficial enjoyment of the land from which it was taken (Meyers & Tarlock, 1980). Thus, all neighbors have equal rights to the use of the water found under their land as long as the use is "reasonable". There has been much confusion in the definition of ground- water. For legal purposes groundwater is divided into under- ground streams and percolating groundwater. In Michigan, limited cases have dealt with groundwater yet the court has decided that the right to use percolating water is governed by the rule of reasonable use (Dewsnut & Jensen, 1973). Any underground water is presumed to be percolating water unless the existence of an underground stream can be proven. Percolating waters are defined as waters which move under the ground without following a definite channel, and correspond to water in the zone of saturation (Rota, 1985, p.27).1 In applying the rule of reasonable use, restrictions are placed on the use of the water. A landowner's right to the 'The zone of saturation is discussed in Chapter 1. C II. of am th sta USE tlm abIl baSE On a been distj ww- 26 underIYing groundwater is restricted to the quantity necessary for use on his land. Transporting water off the land from which it was pumped is not allowed and water withdrawn and used on the land must be deemed reasonable and can not be wasteful or malicious (Rota, 1985). In dealing with this second restriction, correlative rights become important. Correlative rights follows the concept that for every right there is a corresponding duty: a right to use the water and a duty to act reasonably. A riparian owner is not allowed to exclude other riparians from equal use and enjoyment of the water (MSU, 1985). When there is active competition for the water, correlative rights offers a formula for allocation of uses (Dewsnut and Jensen, 1973). One of the fundamental tenets of the riparian doctrine is that the amount of groundwater a riparian may use depends on the purpose and amount that others are using (Meyers & Tarlock, 1980). Hence, there is a strong necessity for the riparian owner to under- stand how the use of the water will affect others. A principal difficulty arises in determining reasonable use. In Michigan ”reasonable use" is defined one case at a time and the cost of litigation to pursue a claim of unreason- able use is very high (MSU, 1985). The rule itself is based on the theory that groundwater movement is still lacking in scientific knowledge and it is unfair to impose liability on a user of groundwater if damage to others could not have been reasonably foreseen (Meyers & Tarlock, 1980). Thus, a distinction is made between intentional or unintentional US C0 ba: QUE pol 3.2 27 damages. A Michigan Court of Appeals decision stated that liability depends on whether the activity, if intentional, is unreasonable: or, if unintentional, is negligent (Hart v. D'Agostini, 7 Mich. App. 319, 151 N.W. 2d 26, 1967) (Dewsnut & Jensen, 1973). Reasonable use is based on four determinants: (1) the physical characteristics of the land: (2) conflicting uses of the water: (3) the economics of the surrounding community: and (4) local politics (MSU, 1985). Today the basic law of groundwater is nuisance litigation, and it can be questioned whether reasonableness is based on science or politics. 3.2 Local Government Role in Groundwater Policy Local governments are granted a variety of powers from federal and state authorities. These powers vary within regions and for this study focus will be on local governments in Michigan and their role in preventing and controlling groundwater contamination from agricultural practices. The general law controlling water pollution for Michigan is the Water Resources Commission Act, Act 245, P.A. 1929. It has three main provisions which are implemented by local authorities: (1) Permits are required for all dischargers of waste into water systems in order to control water pollution: (2) The collection of fees from regulated dischargers: and (3) Compliance enforcement of dischargers with permit requirements (DNR, 1985, p.21). 34;, n. ; ~ W, Th. IQr 0f 28 These provisions established under Act 245 are apparently limited. The Department of Natural Resources stated, ”Exist- ing resources and demands on DNR compliance staff are such that it is difficult for the staff to effectively implement Act 245 (groundwater discharge) permit compliance monitoring and associated follow-up investigations” (1985, p.16). The use of Act 245 as a monitoring device over agricultural pollution is restricted. The controlled application of agricultural fertilizers, for normally accepted uses, does not require a permit and also does not require groundwater monitoring (DNR, 1983). Thus, the township does not keep records of the amount of fertilizers applied to the land and monitoring of groundwater is only done randomly, unless done so by the private individual (Kirkpatrick, 1986). Local authorities can assist in groundwater protection in a variety of ways, depending on the amount of funding and staff allocated to this goal. The assistance can come in forms of: (1) Data collection, analysis, and dissemination: (2) Land use planning and zoning: (3) Development of local groundwater protection programs: (4) Educational programs: (5) Technical assistance to businesses: and (6) Cooperation with state programs (CCEP, 1984). The Cabinet Council on Environmental Protection (CCEP) recommended that the local government role emphasize zoning as of particular importance in groundwater protection because of the possibility of isolating high-risk activities from m “y. r i. ,. 29 driflking water sources. Local authorities are the only regulators governing zoning laws (DNR, 1986). CCEP also stated the importance of close contact between local health departments and the public for often this type of authority is the first to be notified in cases of groundwater contamination (CCEP, 1984). It is important to strengthen the bond felt between local health departments and the community. 3.3 State of Michigan Role in Groundwater Protection Approximately 49% of Michigan's population depends on groundwater for drinking water sources: about 4.5 million residents (DNR, 1985a, p.1). Heavy use of groundwater also arises in various industrial processes, such as agricultural industry. As of July 1985, over 1000 groundwater contamina- ption sites (known or suspected) have been identified, with more being discovered each month (DNR, 1985a, p.1). Basic information on groundwater geology, quantity, and quality in Michigan is limited and inadequate to support effective prevention programs (DNR, 1985a: CCEP, 1984). Yet, this information is vital for protection of the public health from ‘contamination. Michigan first expanded groundwater protection efforts in 1982 with the development of the Groundwater Quality Division \of the Department of Natural Resources. The need to deal with ipontaminated water was the backdrop for the development of this division (CCEP, 1984). In 1984, Governor James Blanchard in the State of the State address established as a priority 30 act ivity the protection of the state's drinking water supply. Hi5 address noted that focus should be on preventing contami- nation of the state's drinking water and that the state has not done enough to protect groundwater (CCEP, 1984). He requested that the Cabinet Council on Environmental Protection develop a state policy on groundwater which also offered recommendations for implementation of that policy. The state policy of groundwater is directed toward the fulfillment of three main goals: (1) prevention of future pollution and protection of public health: (2) maintenance of high quality groundwater supplies for drinking, agricultural, and industrial uses: and (3) provision for the opportunity of economic development (CCEP, 1984). To achieve these goals the actions of the state are based on the following policies: 1. Protection of drinking water aquifers. 2. Human exposure to critical materials be limited to the maximum extent possible. 3. Encouraging economic development by assisting developers in locating where there is a low risk to drinking water supplies and by developing regulations that do not overly burden commerce. 4. Current plans must consider future groundwater needs. 5. Coordination of inter-agency programs with state goals for groundwater management (CCEP, 1984). The authority for the groundwater quality program in Michigan is derived from a conglomeration of several state laws, which are summarized in Figure 3.1. Specific ones are discussed below with emphasis placed on those pertaining to agricultural uses of groundwater. These statutes take groundwater into consideration in many different forms. Act 64 of 1979 - Hazardous Waste Management Act Specifies the engineering of hazardous waste landfills and provides for the licensing and regulation of individuals engaged in the use of hazardous waste. Agt 127 9f 1970 - Michigan Environmental Protection Act Provides methods to protect the air, water, and other natural resources through judicial proceedings regarding environmental standards. Act 243 of 1951 - Serviging of Septigngnkg. Seepage Pits. or Cesspools Regulates the licensing and bonding of the servicing and cleaning of septic tanks, seepage pits, or cesspools. Act 245 of 1929 - Watgr Resources Commission Act General water pollution law regulating discharges to groundwater and grants permitting for certain discharges. Agt 307 9f 1982 - Environmental Response Act Michigan's version of the federal "Superfund" program. Act 368 of 1978 - Part 127L Groundwater Quality Control Authority for monitoring water supply and quality through the Public Health Code. Act 399 of 1976 - Michigan Safe Drinking Water Act Protects public health by providing for supervision and control over public water supplies. Act 423 of 1984 - Underground Storage Tank Registration Requires the registration of particular underground storage tanks. Act 641 of 1978 - Solid Waste Planning and Management Act Regulates the management of solid waste. Figure 3.1: Major State Laws Affecting Groundwater 32 However, there is no comprehensive legislation governing the regulation, utilization, and administration of Michigan‘s groundwater resource. 3-33 Michigan's Acts Affecting Groundwater The Water Resources Commission Act, Act 245, PA 1929. As discussed earlier in this chapter Act 245 regulates discharges to groundwater and grants authority to the Water Resources Commission to permit certain discharges. According to the rules of the Act, "All groundwaters of the state, in usable aquifers and of a quality suitable for use as individual, public, industrial, or agricultural water supply, shall be protected for these uses." (Rule 2204) (CCEP, 1984, p.7) This then gives authority to the state to grant and regulate discharge permits. This general water pollution law is limited in its control over agricultural practices which may pollute the underlying groundwater, due to the fact that the use of fertilizers do not require any permits. The Michigan Environmental Response Act, Act 307, PA 1982. In an effort to continually identify sites of environmental contamination and provide funding for clean-up, Act 307 is Michigan's version of the federal "Superfund" program.2 The activities under this Act include: provision of alternate water supplies, preliminary investigations of contamination, feasibility studies, initial responses to contamination (such as barrel removal), and large scale clean-up activities 2Discussed further in section 3.4b ) 33 GM¢R91985). This Act has not been applied to agricultural contamination (Kirkpatrick, 1986). The Solid Waste Plgnning and Managemgnt Act. Agt 641. PA igzggp Act 641 provides requirements for landfills which vary depending on the soil make-up of the area. Hence, the protection of groundwater aquifers will also vary among regions. Past incidents of contamination of groundwater aquifers have occurred from disposal sites not covered by Act 641 (CCEP, 1984). The true effect of this Act will depend on what the future shows. The Hazardous Waste Management ActL,Act 64, PA 1919. Act 64 specifies the engineering of hazardous waste landfills and provides for the licensing and regulation of persons engaged in the use of hazardous waste (DNR, 1985). Any individuals generating, transporting, treating, storing and disposing of hazardous waste will be regulated under this Act. Safe management and disposal of hazardous waste is the backbone for Act 64. 3.3b Administration of Water Rights Michigan Department of Natural Resources. The DNR is the principal state agency involved with environmental regula- tion. A major responsibility of the department is to adminis- ter legislation designed to protect riparian rights. Any projects which may interfere with the use of water by other riparian landowners or the public will be regulated by the DNR. Permits are issued when the project will not harm the 9‘ 3": 1f Pr 51.1 mi ab: the 34 publicz‘trust, the public interest, or the rights of the riparian (Dewsnut & Jensen, 1973). With the creation of the Groundwater Quality Division (GOD) in 1982 the priority of protecting the state's groundwater increased. This division is responsible for the issuance of groundwater discharge permits under Act 245. GOD also administers both State and Federal cleanup programs by implementing the State Environ- mental Response Act and the Federal Superfund Program (DNR, 1984). MichiggngDepartment of Public Health. Under the Department of Public Health the Public Water Supply Program provides supervision and testing of public water supplies in order to protect the public health. In Michigan as of 1984 approxi- mately 6.9 million residents depended upon community water supplies, and 3 million persons relied on private wells as their primary source of drinking water (CCEP, 1984). This program provides for monitoring of "municipal type" water supplies. When contamination is found, emphasis is placed on minimizing public exposure, providing complete information about health risks and actions being taken, and working with the community in providing treatment (CCEP, 1984). All new private water supplies are regulated by the Private Water Supply Program which oversees the construction of the wells in order to prevent human health problems. Under this program well drillers are trained, registered and regulated in order to aid in proper construction of the private water supplies. Since 1983 staff reductions and budget cuts have Vi TE V9 da OI 35 (xxmdrred in the Department of Public Health (CCEP, 1984). Hence, at a time when monitoring and surveillance are especially important, an increasing number of groundwater contamination episodes imperil public water supplies. Michigan Department of Agriculture. Water sampling programs under the Michigan Department of Agriculture are targeted to private wells which are used by food or agricul- ture establishments. Thus, the purpose of monitoring the 9wells is to prevent chemical contamination of the food or animal feed supplies. The regulatory responsibilities of the Michigan Department of Agriculture pertain to the use of pesticides not fertilizers. Sampling is done randomly in rural areas where it is known that particular pesticides are used (Kirkpatrick, 1986). Water Resources Commission (WRC). The Water Resources Commission has been established to protect and conserve the water resources of the State. It provides oversight for the above programs while establishing a connection among the various state agencies. Control over the pollution of surface waters, groundwaters and the Great Lakes, and thus the primary responsibility for water quality control in Michigan, is vested in the WRC. The Commission dictates pollution stan- dards with regards to the public use to which the waters are or may be put. It has the authority to restrict the polluting content of any waste material or substance discharged into the waters of the State (Dewsnut & Jensen, 1973). Public health concerns are considered through the issuance of permits, Pc 5t 36 sighting of facilities, and response to contamination pro- blems. The State Departments of Agriculture, Natural Resources, Public Health, and Transportation, and also industrial, municipal, and conservation groups are represented on the seven member Commission which meets monthly. In regards to groundwater, the Commission approves discharge permits after deciding that the quality of the groundwater will not be diminished. 3.4 Federal Role In Groundwater Protection State rules of water law define the nature and limit of water rights, however the federal role in water resources should not be ignored. Under current federal policies the responsibility of the state in protecting groundwater has increased. The Reagan administration has placed emphasis on the responsibility of state groundwater protection. There are numerous programs within the federal government to deal with groundwater quality protection, and in many instances federal powers take precedence over water use rights created by the state. However, it can be questioned whether the federal government is exercising the full extent of its authority. Recognition of groundwater in federal policies has been slow to evolve. It was not until 1968 that mention was made to groundwater, as compared to surface water, and at that time only a small paragraph was written on the federal role in groundwater protection (Rota, 1985). In 1973 a full chapter mlzw‘; .’.... pi 5t 37 was devoted to groundwater management with the inclusion of a discussion of quantity and quality problems. In 1980, U.S. Environmental Protection Agency officials testified before Congress that in the majority of states there was a lack of adequate programs to bring about an inte- grated approach to groundwater management (Horne, 1982). Previously, the Carter administration had determined that existing authorities could adequately protect the groundwater if responsibilities were more clearly defined between state and federal authorities. A groundwater protection strategy was established shortly before the administration left office. The Reagan adminstration did not act on this stra- tegy. However, in 1985 EPA established an Office of Ground- Water Protection. The responsibilities of this office are to coordinate all groundwater activities within EPA, provide guidance to regional groundwater programs, and strengthen guidelines for state and federal groundwater programs and projects (Water Impacts, 1985a). The office is considered a policy development and coordination office and does not carry out direct programs. At this time it is often difficult to distinguish between state and federal responsibilities. No explicit, comprehen- sive national mandate exists to protect groundwater quality. Not all sources which contaminate groundwater, or have the potential, are addressed by federal laws and programs. .Non-hazardous, non-waste, and nonpoint sources have much less stringent requirements than point sources, m 73,4 ." ‘" ' “a 38 eSPECially hazardous wastes (OTA Study, 1984). Also, at the federal level there is not a concentrated effort to collect, analyze, and use groundwater quality data (CEO, 1984). Conse- quently, protection efforts for groundwater quality are fragmented and there is no single agency or organization responsible for all groundwater programs and activities does not exist. The remainder of this section discusses federal groundwater strategy and statutes. 3.4a Federal Groundwater Protection Strategy The EPA issued a national groundwater strategy in January 1984. One goal of the strategy is to enable better use of the many federal statutes which the EPA uses in protecting ground- water (CEQ, 1984). The four main objectives of the strategy are: 1. Expanding groundwater jurisdictions at the state level. 2. Increasing controls over larger, inadequately addressed sources of contamination (ie. leaking storage tanks, surface, impoundments, and landfills). 3. Declaring guidelines for EPA decisions affecting ground- water protection and cleanup. 4. Enhancing the organization of EPA's groundwater manage- ment at the headquarters and regional levels (CCEP, 1984). Although this strategy recognizes the need for comprehensive resource management, the details of the strategy do not fully provide for it (OTA Study, 1984). The EPA, in hOpes of achieving consistent protection across Federal programs, is in the process of implementing a ground- water classification system. The belief behind this approach 39 is that not all groundwater is of equal value (CEO, 1984). Thus, the level of protection will vary depending upon what is felt to be appropriate to the current and future use of the groundwater. The Groundwater Strategy defines three classes of groundwater: (1) Class I - "special" groundwater where restrictive environmental controls are necessary: (2) Class II - groundwaters which require the typical level of protection from EPA programs: and (3) Class III - groundwater which is not considered a potential drinking source and is of limited use, thus requiring less stringent protection (CEO, 1984). These classification systems are to be used in EPA decision- making processes but individual states are not required to adopt the program. 3.4b Federal Authority There are approximately sixteen federal statutes which address groundwater protection. Regulatory authority is granted to two federal agencies, EPA and the Department of the Interior. Following is a brief description of federal statutes which provide authority to control groundwater contamination and could have an impact on agricultural contamination. These are summarized in Figure 3.2. Federal Water Pollution Control Act of 1972 (FWPCA). The FWCPA of 1972 was the first Federal legislation containing authority to control groundwater pollution. Amendments by the 1977 Clean Water Act granted authority to EPA over both surface and groundwater. Three sections of FWPCA give federal Federal Water Pollution Control Act of 1972 (FWPCA) 1 Contains: Amendments by the 1977 Clean Water Act, Section 208 area-wide planning program, Section 303 water quality standards and implementation plans, and the National Pollu- tant Discharge Elimination System (NPDES). Safe Drinking Water Act of 1974 (SDWA) Groundwater management is covered by: the Underground Injection Control Program, the Sole Source Aquifer Provi- sion, and national water quality standards. Resource Conservation and Recovery Act of 1976 (RCRA) Enables the supervision of municipal solid waste and hazar- dous waste disposal. Toxic Supstance Control Act (TSCA) Regulates toxic substances in the manufacturing, use, and disposal cycles. Comprehensive Environmental Response. Coppensation. and Liability Act of 1980 (CERCLA, "Superfund") Provides immediate response to hazardous substances in the environment. Figure 3.2: Major Federal Laws Affecting Groundwater authority over groundwater: the Section 208 area-wide planning program, the Section 303 water quality standards and implemen- tation plans, and the National Pollutant Discharge Elimination System (NPDES). Under the authority granted by the Section 208 area-wide planning program, EPA can require states to establish ground- water quality protection plans. Also contained in this section is authorization to established programs to develop Best Management Practices to control nonpoint source pollution 41 in rural areas (OTA Study, 1984). A degree of uncertainty in regulatory responsibilities over groundwater has risen due to the term "navigable water" contained within the Act. Yet, the Clean Water Act defines navigable waters as the "waters of the United States", thus including groundwater. The authority vested in EPA under the Clean Water Act has remained largely untested and uncertain (Horne, 1982), partly due to the termination of funding for Section 208 activities (OTA Study, 1984). According to the OTA study the Clean Water Act is the only Federal statute which regulates fertilizer application as sources,of contamination (1984, p.76). Section 303 of FWPCA grants EPA authority to require states to develop and implement groundwater quality standards for cases where a clear linkage between ground and surface waters can be shown. Yet, this has not been developed and nationally consistent groundwater quality standards have not been implemented (Horne, 1982). The National Pollution Discharge Elimination System permit program has the authority to control discharge of pollutants into groundwater. This authority could be administered by states if given approval by EPA. Conflicting judicial decisions have divided EPA's authority over this administra- tion (Rota, 1985). At this time the NPDES permit program is not implemented federally. However, some states have chosen to extend the authority to the use of groundwater (OTA Study, 1984). The to E 5011' 1 42 The Safe Drinking Water Act of 1974 (SDWA). The Safe Drinking Water Act was developed to ensure the quality of drinking water and to control pollution of both ground and surface waters. Groundwater management is covered by three provisions in the Act: the Underground Injection Control Program, the sole source aquifer provision, and the establish- ment of national water quality standards and treatment technologies for public drinking water (Horne, 1982). The latter provision is the only one which covers agricul- tural pollution of groundwater. Water quality standards are provided by SDWA to protect drinking water originating from surface or groundwater. Two types of standards are imposed upon drinking water (Rota, 1985). States are issued primary enforcement responsibility for public water systems. Federal- ly enforceable primary standards designate maximum contaminant levels, while secondary standards serve as state guidelines for the odor and appearance of public drinking water. At this time standards for only 22, out of over 200 natural and synthetic compounds found in groundwater, have been establish- ed (OTA Study, 1984). The Reagan Administration, in an effort to replace SWDA due to its cost, is developing plans to grant authority for states to set their own drinking water standards (Gass, 1985). The Resource Conservation and Recovery Act of 1976 (RCRA). The Resource Conservation and Recovery Act contains provisions to enable state governments and EPA to supervise municipal solid waste and hazardous waste disposal. "Solid waste" is 43 chafined to include garbage, refuse, sludge, and discarded waste except for liquid domestic sewage, industrial point sources subject to other regulations, and nuclear material covered by the Atomic Energy Act. RCRA's definition of ”disposal” specifically includes discharges into groundwater (Rota, 1985). These definitions grant EPA the authority over nonpoint source groundwater pollution which is lacking under FWPCA. However, critics of RCRA have stated that the Act misses the basis for groundwater protection since its intent is to ”protect the environment" rather than the drinking water (Horne, 1982). Toxic Substance Control Act (TSCA). The Toxic Substances Control Act grants authority to EPA to regulate toxic sub- stances in the manufacturing, use, and disposal cycles. This does not enable EPA to directly protect groundwater, but does so indirectly by controlling the substances which pollute aquifers. If disposal may present an "unreasonable risk", EPA has limited authority to control the substance. However, if the risk is definable then EPA has extensive regulatory power. The Council for Environmental Quality stated in 1980 that TSCA "clearly gives EPA the authority to control the disposal of most if not all, of the toxic chemicals now found in groundwater supplies" (CEO, 1980, p.99). Comprehensive Environmental Response, Compensation, and Eiépility Act of 1980 (CERCLA), ”Superfund”. This Act gives authority to the Federal government (EPA) to immediately respond to releases of hazardous substances into the 44 environment which pose a danger to public health or the environment. ”Environment" is defined as including ground- water and drinking water supplies (Horne, 1982). A multi-million dollar Hazardous Substance Response Trust Fund has been established to enable immediate response to contamination, thus the nickname "Superfund". Funding for this is primarily provided by industry through taxes, with one-eighth from legislative appropriations (Pye et al., 1983). The Federal government will take initial action for clean-up if the responsible party refuses. The Attorney General will then file a court suit against the responsible party to reimburse the Fund. 3.5 Unresolved Issues The area of groundwater protection law contains quite a few unresolved and controversial issues. In any area where protection of human health is of great concern the appropriate standards for government action are often debated. What is the best method for controlling groundwater contamination and to what degree should this take place? Should prevention or clean-up be the strategy? Andrew Hogarth, the Chief of Remedial Action - Michigan Groundwater Ouality Division con- cludes, ”Although prevention is cheaper than cure in the long run, it is difficult to get legislation passed on what is viewed as only a potential problem" (Water Impacts 1985a, _ w? 1.3-1!- - 45 P-4)-3 Does this mean that due to the political process the focus should always be on cleaning up after the contamina- tion? If not, what level is the optimal level of protection and how can this be translated into specific regulatory tools? Flexibility within a program is important due to the fact that regional differences in physical, institutional, econ- omic, and social factors affect the levels of possible contamination. However, the optimal amount of flexibility is uncertain. Furthermore, the division of authority and responsibility between programs and agencies and local, state, and federal government involvement further complicates the effectiveness of a groundwater strategy program. Who pays for the protection? Without a consensus as to how a program can be effectively implemented, its effectiveness will be inade- quate. Currently, the Federal government has the authority to control many activities which affect groundwater. States carry the principal role in protecting the resource due to the history of groundwater rights and the diversity of the hydrogeology. Local governments have public health and zoning authority that can be used in groundwater protection (CEO, 1984). Thus, overlapping occurs between jurisdictional duties and an incremental approach to groundwater protection has been adopted to combat contamination. However, a comprehensive ’It is an empirical question whether prevention is cheaper than cure. Raucher (1984) found that in case studies in Florida it was less expensive to clean up a contamination site than to have tried to prevent it. 48 approach where divisional boundaries are clearly stated may be essential in making progress in groundwater protection. At this time the programs are incomplete in providing a coherent, integrated approach in managing the groundwater quality. m . .'Hi..:. I“ ' «ls-"h“ Chapter 4 CONCEPTUAL FRAMEWORK FOR PREDICTING THE PERFORMANCE OF ALTERNATIVE GROUNDWATER INSTITUTIONS With large numbers of contaminated wells being discovered in Michigan and in the United States, the question must be raised as to why the pollution continues. The root of the problem is the interaction among users of the resource as needs for the water conflict. The elements of the problem, how, when, where, and why, can be better understood by analy- zing the behavior of the participants. This chapter looks at groundwater quality through a conceptual framework in order to identify the particular aspects of groundwater contamination which can be influenced by the political system. Thus, the role of this research is to gain insight into how the perfor- mance of the system can be improved by establishing a more complete understanding of what is occurring, including information on the consequences of alternatives. 4.1 The Situation-Structure-Performance Paradigm The situation-structure-performance (SSP) paradigm provides the building blocks for the conceptual framework used in this research. The basis of this framework is in industrial organization, a theory within economics, which uses a market 47 48 structure-conduct-performance paradigm for analysis pur- poses. The paradigm was originally developed in the 1930's by Edwin S. Mason and was subsequently expanded by Joe S. Bain.‘ Schmid (1978) has modified this paradigm, in the form of SSP, to extend to the political economy of a community. By using the SSP paradigm the major role of the research is to aid in obtaining a better understanding of the conse- quences of community members reactions to the institutional environment in which they live. By determining what perfor- mance to expect, the decision maker has established a basis for policy change. Being able to predict the activities of individuals by observing how their actions change in relation to different structural situations enables a method for comparing and choosing between alternative institutions. This process involves analyzing the tradeoffs associated with the various actions. This research uses the SSP framework to identify the intrinsic characteristics of groundwater. This information can then be used by the policy analyst to determine how the situational characteristics of the resource combined with the structure of community institutions affects the actions of individuals within the community and the consequence of the actions on the groundwater. The analyst needs to have a clear understanding of why particular actions result from the structure of the community, its laws, regulations, customs, etc., in order to understand what behavioral changes can be ‘For further discussion, see Scherer, 1980. 7“. Y‘s—g 49 predicted as a direct consequence of changes made by the decision-makers of the community. For example, before implementing a tax levied on the fertilizer industry to decrease the probability of groundwater being contaminated by nitrates, it would be important to hypothesize the actions of the industry and how this will be passed on to farmers. How will the characteristics of the groundwater resource influence the behavior of those involved, thus affecting the quality of the groundwater? If the objectives of the tax will not be met a different institutional structure should be proposed. This can be forseen by analyzing the characteris- tics of the resource in relation to industrial behavior and specific regulations. As individuals react to the instituted structure the environment may be altered. The tax placed on fertilizers may change the type of crops grown in a region. Hence, a particu- lar outcome has been influenced by the chosen structure (Shaffer, 1980). This system is continually evolving around the situational characteristics, feeding into each of the individual components. For example, the use of groundwater classification systems may alter where industries decide to build new plants, affecting the growth of the economy within different parts of the state.. Thus, it is possible that as EPA enforces these classifications it may depress certain regions. This effect of a regulatory structure, and how it will subsequently change individuals' roles within society is important to understand before the situation arises. 50 Consequently, the objective of using the SSP paradigm as a mode for analyzing a problem is to provide a framework for linking the actions of the community to the political econ- omy. Applying the SSP paradigm to groundwater quality policy facilitates an analysis of groundwater management within the framework of the whole community. Hence, the SSP paradigm can be considered a positive framework, as opposed to normative, for it is based on predicting the results of individual behavior within alternative sets of rules. Discussed below are the essential components of the paradigm in further detail. 4.2 Situation The innate characteristics of a good will determine the consequence a policy prescription will have on individual behavior. The behavioral effects of a particular structure will vary depending on the situational characteristics of the resource. Situational categories include incompatible use, economies of scale, joint impact, exclusion costs, and sur- pluses (Schmid, 1986). Each of these categories will directly affect the interdependencies of individuals and how societal structure influences performance. To illustrate this point one can look at a problem affect- ing farmers. How and when particular fertilizers are applied to the land has become a controversial issue. It may be proposed that fertilizers not be used when wells record a certain level of nitrates in the water. However, due to the e-l—u.‘ 3 vflK’ '77.? 51 situational characteristics of groundwater, the high costs involved in monitoring all wells, implementing a regulatory system to control fertilizer use would most likely only increase costs to regulators without alleviating the problem. A different alternative needs to be worked out. Hence, due to the high exclusion costs, the institutional structure must be chosen carefully if particular water quality levels are desired. 4-3 Situational Characteristics of Groundwater Groundwater raises a specific variety of human interdepen- dencies. As conflicts arise between individuals, understand- ing the situational characteristics of groundwater will enable predictions to be made about the consequences of different policy options. Each of the situational classes encompassing groundwater are discussed below. Incompatible Use. The effect one person's use of a good has on another's use can vary in many ways. When that person's actions deny the consumption by another, the two uses are incompatible. Hence, an incompatible use good is one which has the aspect of two or more uses or users which are not congruous (Schmid, 1978). Groundwater has this quality. Varying quality requirements from the same aquifer can create conflicts between users and it is not feasible for two users to both consume the same water. However, the individuals can share an aquifer while requiring different quality levels, if the contamination plume does not interfere. Differing needs 52 for the water are not always incompatible. Generally, though, an aquifer should not be used as a waste dump by one and a drinking water source by another. Also as one person consumes the water, the supply available is decreased for other users. Depending on the rate of recharge this may be depleting the resource. Competition for the water source is inevitable. The standard of quality which exists within an aquifer will define the quantity available for different uses. If an aquifer is of the quality which can be used for irrigation, but not for drinking, then the water available for drinking has been limited by its quality. It is important to recognize incompatible uses of the groundwater in order to focus attention to the immediate problem of conflicting interests in the resource. Exclusion Costs. As a person is granted the property right over a resource the capability of excluding other individuals from the good greatly impacts the effectiveness of the owner- ship. Granting a person the right to exclude others does not necessarily make exclusion effective. The cost of exclusion, such as policing costs, may be infinite or may be small relative to the value of the product. This distinction is very important in describing the good. The costs of policing the Quantity of the groundwater resource can be considered in the category of low exclusion costs. It is possible to effectively monitor the wells built and the amount of water taken from a particular aquifer. As factor ownership is granted over the groundwater, exclusion WW» “is Itwd‘ " ‘3' '3' F .~ ..‘51‘ ‘— w-- r..- an In the I29: high 53 of other users is economically and physically enforceable. In Michigan, quantity limits are established through the common law definition of ”reasonable use.” Limits on withdrawal can be established, the allocation of supply is technically and enforceably feasible (Carriker, 1985). Exclusion costs, however, in respect to Quality are minimal only if the polluter can be identified. Exclusion costs for attributes of groundwater quality are much higher than for quantity. The cost is particulary high when contami- nation sources are diffuse or non-point. Legal authority exists for government to exclude those unreasonably affecting the quality attributes. Yet, the cost of administering such exclusion can become prohibitive and politically unacceptable when the source of contamination and magnitudes are uncer- tain. It is known, for example, that nitrogen fertilizers applied in farm practices will under certain circumstances contaminate groundwater. The use of fertilizers has high exclusion costs characteristics, due to the high transactions costs involved in enforcing when and how a fertilizer is applied to the land. Yet the use of fertilizers can affect the quality of the groundwater as those fertilizers not absorbed by the crops are released into the environment. In efforts to alleviate groundwater contamination, policy decisions should recognize the difficulty and the expense of monitoring how much fertil- izer is used by the individual farmer. Thus, even if these high risk farm practices could be defined and regulated, and In It th. the iii] 54 the political cost of doing so were within reasonable bounds enforcement would be a problem. An important policy challenge is to decrease ambiguity as to contaminant, yet even if this occurs groundwater quality will remain a high exclusion good. When a resource has high exclusion cost characteristics often another aspect must be recognized also, that of exis- tence value. An intrinsic value is placed on the very exis- tence of the good. This is true for a clean water supply. Individuals feel the right exists to have the resource without quality degradation. This value goes beyond water use or concern for potential health impacts to the very existence of the resource itself. Fear about the possibility of losing that resource in the future, or sacrificing even the option for future use, creates real stress that may be translated into support for policy to avoid contamination. A sense of security exists in knowing that the quality of the water is sufficient to be used as a drinking water source at all times. The value placed on the resource will be larger for those systems which are rare or threatened in some manner (Peterson & Randall, 1984). As general awareness of the threat of widespread contamination of groundwater increases, the existence value which individuals place on that resource will heighten as well. This existence value, or as Schmid terms option demand, is dependent upon the individual's desire to keep alternatives for use open in the future (Schmid, 1978, p.11). However, when exclusion costs are high it is difficult to charge 55 individuals the price they would pay for the clean water supply in the future, for the quality of the water is avail- able whether the price has been paid or not. Thus, an interdependence exists between existence value and high exclusion costs. It is inherently difficult to achieve a market price for the high quality water which would include the value placed upon its existence. Information ngpg. Information is a necessary tool for the effective interaction of two parties. How property rights are assigned will bear greatly on the costs of acquiring informa- tion, the extent of the costs, and consequently on the costs of mistakes (Schmid, 1986, Ch. 6). In a two party situation, the person who has the right to use the good will have an advantage over the second person, for she will have full knowledge of how the resource is being used and the costs imposed upon it. The second party will not have this informa- tion and costs may be incurred in finding it out. Perfect information cannot be assumed. Groundwater is characterized by high information costs. This situational characteristic plays a large role in the interdependence between groundwater users. Due to the physical nature of groundwater it is difficult to monitor quality levels and uncertainty arises as to where, when and how the contamination will occur. These levels differ from region to region and data on groundwater quality are most often poor (CEO, 1984). An individual may be unwittingly contaminating the groundwater. Individuals lack information an (it ed th. use res the art's ledg estal “fee than I 4.4 S The the CORl L I UOlmdarl IhUS' thl 56 on how their actions affect quality and quantity of the resource. Educational information on the relationship between the land surface and the groundwater below could help to prevent some of the contamination occurring through ignor- ance. Not keeping accurate data on quality of groundwater aquifers makes it extremely difficult to understand the situations which cause groundwater contamination, exact causal links between usage and contamination are difficult to detect. The health effect to humans from contamination is surround- ed by uncertainty due to the lack of scientific knowledge in this field. 'Human perception of the associated risk in the use of groundwater strongly affects their behavior towards the resource and each other. Conflict will be intensified when the uncertainties about incompatibility and irreversibility arise and different risk preferences are confronted. Know- ledge of this risk and information variable is essential in establishing policy emphasis, for the emotional and physical effects of contamination will impact some individuals more than others. 4.4 Structure The chosen characteristics of the setting in which contami- nation of groundwater occur is the structural aspect of the conceptual framework. These characteristics act as boundaries to those choices which community members act upon. Thus, the structure of the community constrains and expands gl‘i In! the Sch Schm dafi Comml the r 57 the choices of the participants. Recognizing this component of behavior allows the decision-maker to analyze how the situational characteristics of groundwater will be affected by those publicly chosen aspects of the community. For example, the Safe Drinking Water Act is a structural rule which restricts an industry's options in the amount of chemicals which can be dumped into a river, while at the same time increasing the opportunity for consumers to drink the water. Hence, the system of organization and control of resources within society will establish the opportunity sets for indivi- dual community members. The structure consists of three major dimensions: jurisdictional boundaries, property rights, and rules of representation. Jurisdictional boundaries refer to who and what are included within a community's sphere of control (Shaffer and Schmid, 1979). The distinction between local, state, and federal government responsibilities is an issue of jurisdic- tional boundaries. Presently, the amount of jurisdiction over groundwater policy granted to individual states is increas- ing. This will allow protection approaches to focus more on the regional characteristics of the groundwater. Property rights define the relationship among members of society in regards to the use of resources (Shaffer and Schmid, 1979). The laws and customs of the society will give definition to the individual rights and obligations of the community members, in regards to the resource. In Michigan, the riparian doctrine delineates the right of use for 58 groundwater. Thus, the control and access to resources in society are defined by the property rights established by customs and laws which only exist when recognized by the community. As a right to the resource is delineated to a person, at the same time it places a restriction on the use of the resource for other individuals (Shaffer and Schmid, 1979). There are three general categories of ownership: private, public and common. The groundwater resource applies to both private and common, with private rights being the most preva- lent. Private ownership entails responsibility in the use of the resource with control being shared between the individual and the government. The obligations which the government imposes upon the owner defines this relationship. The riparian doctrine grants private rights to the individual with qualifications on use, such as only using the water on the property from which it is taken. Such qualifications as these specify the restrictions placed upon the private owner. Common ownership exists when the rights to a resource are held in common by society. Those wishing to use the resource have the right to do so. In cases where scarcity does not exist, demand for the resource is not exceeding supply. Specific ownership is not of importance when there is enough for everybody. A problem may arise though when the demand for the resource increases leading to possible overuse and degradation of the good. This has come to be known as the ”tragedy of the commons” (Hardin, 1968). tm thl all 4.5 TBS all 197 tim Hhic flirt ISP ture 1a,, ”ith la, i 0n he b°°0m ll, n 59 The third category, rules of representation. involves the basic authority from which rules are made and interpreted. Issues of who is allowed to vote and who is in charge of the agenda are essential to the rules of representation (Shaffer and Schmid, 1979). The costs involved in making decisions and the effects of inherent costs will be highly influenced by how these rules are established, and the delegation of authority will affect which community members count. 4.5 Institutional Structure of Groundwater Use Groundwater can be viewed as a fugitive resource; a resource which is mobile and must be captured before it can be allocated to individuals or groups (Ciriacy-Uantrup & Bishop, 1975). As capture and allocation become necessary the problem of exclusion is posed, and some form of government interven- tion develops. The rules and institutions in Michigan which affect access and use of the groundwater are the structural elements within this conceptual framework; emphasis is placed on agricultural use of the groundwater. As the third chapter illustrated, the institutional struc- ture of groundwater in Michigan is composed of a patchwork of laws and regulations. The Riparian Doctrine in conjunction with the reasonable use doctrine is the basis for groundwater law in Michigan. As an individual "captures" the groundwater on her property and puts it to a "reasonable" use, it then becomes the property of that individual. The laws regulating the reasonableness of agricultural practices are limited. 60 Local authorities act on the laws and regulations established by state government, with local jurisdictional duties primar- ily enforcement responsibilities. 0n the state level, the Water Resource Commission Act provides the major institutional structure over agricultural practices affecting groundwater. Under this Act permits are issued in order to protect the groundwater, however permitting for the use of fertilizers does not occur (CCEP, 1984). The ability to protect the groundwater from agricultural practices in this regard is minimal. There is no single statute or program at the federal level governing groundwater use. There are special purpose laws, however, targeted at parts of the problem. Agricul- ture's contribution to groundwater problems are addressed as part of the Clean Water Act amendments to the Federal Water Pollution Control Act of 1972. The only strategy which can be implemented is voluntary installation of management practices to reduce chances of contamination. Groundwater is not specifically included. Consequently, agricultural production practices have generally not been regulated. The only programs to influence farm practices have been voluntary, with cost sharing as further incentives. ”Right to Farm” laws in many states seek to further establish farmers' rights to engage in reasonable and generally acceptable farm practices. How these accepted practices are defined could protect the farmer's implicit right to add chemicals which contribute nitrates to the water 61 supply and force other water users to find other sources. Alternatively, right to farm could sharpen the farmer's obligation of avoid damaging water supply. Hence, the institutional structure for groundwater use in agriculture revolves around the judicial system, with the public bringing a private nuisance suit against the farmer, if there is a contamination problem.z Management of the ground- water in Michigan is through a process of adjudication. The public must obtain the property right from the farmer through the judicial system. Finally, educating the public to the attributes of ground- water is increasingly being applied to combat the contamina- tion episodes. For example, a successful program of public education was developed by the East Michigan Environmental Action Council for nine townships in western Oakland County. The program was based on the belief that "effective public education for groundwater protection must be carried out by local citizens." Emphasis was on the fact that citizens and local governments can take action to prevent groundwater pollution (DiNovo & Jaffe, 1984, pp.136-138). In defining the structure it is also necessary to identify the significant participating groups in groundwater issues. In the case of this research the classification will be broken down to all individual groundwater owners, those using the 2As of December 1986, no documented cases of nuisance suits being brought against farmers for groundwater contamina- tion from fertilizers have been found. However, law suits have risen regarding animal wastes polluting neighbors' air and water (Leighty, 1986). 62 groundwater for agriculture industry and those dependent on the water as a drinking water source. These classifications can overlap. Other important participant groups do exist, however they will not be considered in the research at this time. Consequently, groundwater has a variety of situational attributes, including high information costs, high exclusion costs, and incompatible use properties. lnterdependence among these attributes establishes the setting within which contami- nation occurs. These pollution episodes are occurring from agricultural practices which are a part of normal production practices. Ignorance and uncertainty about the effects of nitrogen fertilizers to the groundwater accentuates the situation. In Michigan, the Riparian Doctrine is the govern- ing force over use of the resource. There has not been a law established to specifically deal with groundwater quality and protection. This structural situation is not creating incentives that are translated back to the polluter and are sufficient to change contaminating behavior. It is necessary to fully understand these situational and structural charac- teristics in order to be able to understand how policy can alter the performance. 4.6 Performance As a structural situation is instituted within a community, the consequences of the behavior of individuals in reaction to the structure is called the performance. The participants' PEI cla wit lmp 4.7 anal thn gr0U: highe 63 behavior is influenced by the choices and tradeoffs estab- lished by the environment in which they live. The aggregate result of their actions can be viewed as the performance of the community. In an effort to change performance, the structure of political and economic institutions may be altered. A political decision to prohibit the use of ground- water as a depository for agricultural chemicals may force the farmer to change many normal day-to-day practices. How this is done will vary from farm to farm, the overall result is the performance. Within economic theory there are basic behavioral assump- tions. Individuals are assumed to act in their own self- interest and aim to maximize their satisfaction. Understand- ing these goals and ideologies, and documenting the outcomes, enables the analyst to better predict future performance. However this is a very difficult task. By categorizing performance and designing useful impact indicators the clarification of public choices, with respect to activities within the community, may be better predicted; permitting improved community management (Shaffer and Schmid, 1979). 4.7 Groundwater Quality Performance An important behavioral characteristic assumed within this analysis is that individuals aim to optimize their satisfac- tion (utility or profit). Hence, the individual puts the groundwater resource to use in such a manner as to obtain the highest possible utility from the water. A conflict in 64 interdependencies occurs when more than one user, or use, of an aquifer takes place with incompatible uses. With the inherent characteristics of groundwater this increases the likelihood of degradation of the resource. Examining the case of a farmer applying fertilizers to the crops illustrates how maximizing behavior can alter the quality level of groundwater. In a study of Idaho farmers, Holmes found that most farmers follow strong agrarian beliefs; one being that natural resources should be extensively utilized. While aiming to produce larger crops and bigger yields the amount of land and fertilizers in production increased yearly. A health threat was not seen as an imme- diate concern (Holmes et al, 1985). However, a plant can only absorb a particular amount of nutrients, the rest remains in the soil or is leached to the groundwater. As the amount of fertilizer applied to the land increases, the probability of the groundwater's assimilation capacity being reached also increases. Contamination will occur, affecting those using the aquifer as a drinking water source. A farmer is making choices in the context of the rights and obligations which are associated with use of the resource. There are high exclusion costs involved in regulating the amount of fertilizer a farmer applies to the land. The likelihood of policing methods being effective is extremely limited, the amount of fertilizer to apply is a personal decision granted by factor ownership. Yet, the amount applied directly affects the possibility of contaminating the 65 groundwater resource. Hence, a farmer's short term prefer- ences and long term desires differ. As the water is used as a depository for fertilizers it is often at the same time a drinking water source. In the short run, it is beneficial for the farmer to apply chemical fertilizers to his land as yields increase and farm budgets are met.3 However, in the long run this behavior may lead to the farm’s drinking water source being polluted. Ill-health effects to the farmer may result. The farmer is weighing income against clean water. The ability to act rationally will depend on his knowledge of these two factors. The question again must be raised as to the risk preference of the farmer. He is caught in a personal trap. A social trap arises when a farmer continues actions which are to his individual advantage, however the actions of all farmers collectively are damaging to the farmer and society. Individual preferences are weighed against those which are held for society as a whole. If the farmer makes the choice to decrease his use of fertilizer, yet other farmers using the same aquifer do not, the groundwater may still be contaminated. Even though he has stopped the polluting activity, other farmers are still polluting and he may be affected by the contamination. Is it worth his possible loss of income from decreasing the fertilizers if he ’This has not been proven to the extent that farmers perceive it as a fact. Yield can only increase a certain percentage by the use of fertilizers, after that amount the rest of the added nutrients are leached into the groundwater (Pye et al, 1983). 66 feels his actions will not make a difference unless others follow him? This is the essence of the social trap. Due to the uncertainty of contamination, and the high exclusion costs for the use of fertilizers, the farmer may prefer to continue his possible polluting practices in order to maintain what he views as higher profits. How a farmer weighs his options will depend on the actions of his neighbors and the certainty and magnitude of health impacts. Hence, again a tragedy of the commons may occur. Garret Hardin's perspective on what can occur when a resource is considered to be part of "the commons" fits well in dealing with the groundwater resource. Contamination of groundwater is a matter of putting something into the common resource rather than taking something out. What is added may eventually eliminate the use of the water for all. However, it is not a case of man being irrational but rational in a monetary sense; he is maximizing his profit. In the case of agriculture normal production practices are leading to the contamination, and farmers believe it is more expensive to change practices or are not convinced it is necessary. Hence, as Hardin states, we are ”locked into a system of ‘fouling our own nest' when acting as independent, rational, free-enterprisers" (1958, p.7). This is a pure social trap; one that increases in intensity as the population increases and the natural and biological recycling processes become overloaded (Hardin, 1968). A redefinition of property rights is necessary. 67 The lack of understanding of the relationship between the decision to fertilize and water quality problems should also be recognized. Many individuals do not understanding the physical relationship of the land surface and the water below, thus abuse of the groundwater becomes more likely. With surface water this relationship is very evident, but as a hidden resource groundwater is often forgotten. This can be seen in the simple act of disposing of used car oil in one's driveway. Ignorance to the groundwater below is part of the reason behind the action, yet there is also the desire to minimize the cost of getting rid of the oil. At some point the resource's productivity will suffer and all assimilation capacities will be exhausted (Howe, 1979). Once this occurs it is questionable whether the resource can recleanse itself, and if it can what time span is necessary. Hence, how the economy is structured may result in the degradation of the resource. Each individual is trying to maximize his/her satisfaction with the use of the ground- water. The incentive, or the knowledge, does not exist for an individual to adjust the use of the resource to that which will not negatively impact it. Each participant will have an additional impact on the productivity of the groundwater, yet this is not within the planning horizon of the individual. As this behavior continues contamination will become more preva- lent. Figure 4.1 provides a summary of the analysis of ground- water contamination through the SSP framework. Situational Characteristics 1. Incompatible Use Varying quality requirements from the same aquifer can create conflicts between users and it is not feasible for two users to both consume the same water. 2. High Exclusion Costs The costs of excluding individuals from affecting groundwater quality can become prohibitively expensive when the source of contamination is nonpoint. 3. High Information Costs The cost of acquiring information in regards to the physical characteristics of the aquifer and the questions of where, when, and how contamination will occur is very high. Existing Structural Institution in Michigan 1. Private property rights over the groundwater 2. Mixture of laws and statutes with the Water Resource Commission Act providing the major institutional structure. 3. Judicial system, nuisance law Existing Performance 1. Short term preferences conflict with long term prefer- ences 2. Social traps 3. Tragedy of the commons 4. Ignorance Figure 4.1: SSP Applied to Groundwater Contamination Chapter 5 POLICY ALTERNATIVES AND RECOMMENDATIONS The purpose of this chapter is to critique the various policy alternatives for alleviating groundwater contamination and to recommend policy options which could be instrumental in protecting the groundwater resource. By using the SSP paradigm the analyst can evaluate how the situational charac- teristics of groundwater will impact the effectiveness of varying policy alternatives. The first section looks at the role of groundwater quality policy. Following that is a critique of various possible alternatives for enhancing and protecting groundwater quality. The final section offers recommendations for policy alternatives which could have a positive impact upon the contamination problem within Michi- gan. 5.1 The Role of Groundwater Quality Policy What is the rationale behind groundwater policy? Clean drinking water is desired by the public, and it is increasing- ly recognized that pollution is impeding the resource. The role of the policy analyst is to analyze the consequences of designing policy to meet the desires of the general public. In this case the analyst is assuming that water should be of 69 70 the quality to use as a drinking source, for this is what society as a whole demands. The aim is to develop policy which will define the opportunity sets of individuals in such a manner as to change the polluting behavior. There is no direct justification in choosing to redistribute the options of the polluter over the nonpolluter. The majority belief is that groundwater quality should be protected. Groundwater contamination results in "third party" effects which are not accounted for by the polluter. In changing the polluters opportunity sets the analyst needs to focus on designing policy to make the right of pollution an exchangable right which the public and the polluter can bid for. Presently this bidding exchange is impeded for a variety of reasons. Mainly, in the case of nonpoint source pollution the transaction costs are very high to identify the source, thus individuals must incur large costs in suing the pollut- er. In both nonpoint and point source pollution the issue of free riders will decrease the willingness of an individual to bring a legal suit against the contaminator, for if ground- water quality is increased society as a whole will benefit whether the individual pays or not. There are extremely high costs in differentiating the rights to the water from an aquifer, in both quantity and quality respects. Government aims to clarify more clearly these property rights. Examples of this would be the politi- cal efforts to define how much water may be removed from the aquifer, or how the water can be used upon the land. 71 Public desire for direct government involvement has increased as society has gained knowledge about the pollu- tion of groundwater. Government is often expected to reflect the preferences and values of the majority, hence interven- tion may be requested by the public (Libby, 1988).I This has occurred in other environmental situations, such as the advent of litter laws and conservation policies. Libby states, "The essential role of groundwater quality policy...is to adjust the opportunities and options facing those whose actions may cause contamination, in ways that reduce or eliminate the problem" (1986, p.5). The quality of the water will provide a measure of performance. 5.2 Groundwater Quality Policy Alternatives The result of the increasing prevalence of contamina- tion episodes is an enhanced amount of pressure placed upon the government to deal with the pollution. There is an increased desire to know how rules and incentives can be instituted which alter the present management of ground- water. How this is established will affect who is impacted, and who pays for the change in management styles. A variety of policy options have been designed to deal with groundwater quality, ranging from regulatory tools to educa- tional incentives. Each method defines differently the rights of various individuals, has a range of distributional ‘There are obvious cases where this has not occurred, such as civil rights and affirmative action. 72 consequences, and also has varying performances outcomes. Implementing a tax on fertilizers will affect the farmer in a completely different manner than will prohibiting the use of fertilizers over particular aquifers. Each alternative will imply certain consequences for the members of society who use the groundwater. These members may not agree among themselves, thus policy is concerned with the choice of individuals based on the assumed consequences. These various policy options assign property rights to the groundwater differently. To facilitate this analysis of the alternatives to increase groundwater quality, it is important to understand the varying system of property rights and how changing elements of these rights affect all involved (Brom- ley, 1978). When measuring these effects, one must take into consideration ecological impacts as well as distribu- tional and economic consequences. If this type of assessment is not completed a rule or regulation may be imposed which does not help solve environmental problems for such reasons as high exclusion costs and free riders, and there may be unanticipated costs imposed upon members of society. Figure 5.1 outlines five types of ownership situations which various policies impose upon the community. These rules vary by whose rights to the resource are protected and what variation of that right is enforceable. The boundaries between the rules are not strongly defined and will depend upon societal preferences, political power, information about the rights, etc. As society becomes more environmentally Rule I: PUBLIC OWNS THE PROPERTY RIGHT Situation A Farmer may not interfere with public without public consent (Public sells right, farmer buys) Ex. Permits, taxes, zoning, classification system, standards Situation 8 Farmer may interfere with public but must compensate for loss of clean water (Public sells right, farmer unwilling buyer) Ex. Present Michigan system, liability Situation C Farmer may not interfere with public under any cir- cumstances, and the stopping does not imply compensa- tion (Public unwilling seller) Ex. Regulations, fines Rule II: FARMER OWNS THE PROPERTY RIGHT Situation A Farmer may interfere with public and can only be stopped if public buys off farmer (Farmer sells right, public buys) Ex. Market bargaining, subsidies, point source treatment Situation B Public may stop farmer from interfering but must compensate farmer (Farmer unwilling seller, public buys right) Ex. Public acquistion, transfer of development rights Figure 5.1: Alternative Rules of Ownership 74 conscious, the rights farmers have over the quality of the resource change. The boundaries are being redefined. The table provides a conceptual scheme useful for recognizing and examining alternative property right systems and how they apply to various policy instruments. 5.2a Public Sells, Farmer Buys With this type of property rule established, the farmer would not be allowed to discharge any pollutants into the groundwater without the public's consent. The farmer would obtain the public's permission to use the water through such means as the issuance of a permit, paying of a tax, or adhering to land use regulations. Permitting and taxes. If permitting were required for a farmer to apply agricultural chemicals to a field, the farmer would be obtaining the public's permission to use the groundwater, possibly adversely. If taxes were attached to fertilizers this would be a similar arrangement. The public must agree upon the price the farmer must pay in order to use the groundwater. Both taxes and permits make the farmer pay the wage which the public finds acceptable for jeopardizing the clean water; the farmer is paying the public's reservation wage. In Jefferson County, Wisconsin, for example, local govern- ments have been active in regulating the location and manage- ment of animal feeding operations. The County requires a permit for feedlots and poultry farms over an established ‘ -.- nu." 75 size. To be granted the permit the farmer must agree to comply with the restrictions described within the permit (DiNovo and Jaffe, 1984). Thus, the feedlot operations continue by consent of the community. Who bears the cost of this entitlement rule? In regards to permitting, the farmer is required to buy a "license” which specifies the amount of fertilizers legally spread on the ground. The burden would be borne by the farmer in the form of costs incurred in obtaining the permit. With taxes, the burden would be shared between the users of nitrogen fertilizers and the fertilizer industry. In economic theory it is usually deduced that producers will pass the costs of a tax, that all of them pay, onto the consumer of the product. However, if the tax applies only to those farmers who need to use nitrogen fertilizers, this can not necessarily be done. Agriculture exists in a competitive economy making it difficult for those farmers using nitrogen fertilizers to increase the price of their product and still be competitive in the market with other farmers. The burden would be on the farmer to either pay the tax, or decrease the amount of nitrogen fertilizers used, thus passing the costs to the fertilizer industry. Problems in implementation arise with both taxes and permits. Society is demanding clean drinking water sources, yet a tax may not adequately represent this demand, for the costs of the tax would be entirely borne by the farmers and the fertilizer industry, not society. Who pays the 76 costs will depend upon the elasticity of demand for fertil- izer. The burden borne by agricultural producers would be distributed unevenly. Wealthier, more highly educated farmers use a larger amount of fertilizers than poorer, noneducated farmers (Quissenberry, 1986). Hence, the demand for the fertilizers is more inelastic for the first group of farmers. They would continue using the fertilizer even though the expense increased, and the second group of farmers would be more apt to decrease their usage. The goals of decreasing contamination practices would not be met evenly across all farmland.2 High exclusion costs would impact the effectiveness of permitting. To administer and monitor this type of program would require large amounts of time and money. Enormous transaction costs would be borne by the state. For example, in 1984, Kansas spent $10 million for staff to support their groundwater permitting and compliance regulations (NRC, 1986, p. 174). In 1984, The National Research Council identified and researched eleven states with groundwater protection programs and found that none of the programs examined had an adequate number of professionally trained staff to carry out the program requirements. They concluded this was due to relatively low salaries of state employees (NRC, 1986, p.174). 3 In Michigan, fertilizers are used much more heavily in the Lower Peninsula than in the Upper Peninsula. This is assumed to be both due to finances and education (Quissen- berry, 1986). 77 Zoning. A third example of this type of property rule is the implementation of zoning ordinances. Zoning has often been used as a method to separate incompatible land uses on the local level. This alternative can also be used for groundwater protection. By placing restrictions on how the land can be used, protection of groundwater recharge areas is encouraged. Special use restrictions can be added to existing land use laws; increasing protection to particular recharge areas (Libby, 1986). As sensitive areas are protec- ted, these ordinances actually create varying degrees of ownership over the use of groundwater. Persons living within zones allowing degradation will have ownership opportunities whereas those living in regions zoned for extra protection will not. Dade and Broward Counties, Florida have extremely tight groundwater protection ordinances. The counties identified well field areas of influence to establish a basis for regulating waste entering the public water supply. Five concentric zones were established around the public well fields. Protection is the tightest in the middle zone and decreases the further from the well. These restrictions are based on potential for dilution within the well head area of influence (DiNovo and Jaffe, 1984, p.103). In Michigan, these types of ordinances have rarely been implemented, though the authority exists. Two townships in Michigan have used local zoning ordinances to protect the groundwater. Springfield township in Oakland County has 78 recently established a zoning ordinance to regulate new developments over sensitive recharge areas. The ordinances are based on extensive mapping of the physical characteristics of the township. ”Site plan review criteria” have to be adopted by new developments within particular zones. The township supervisor is confident that these new ordinances will provide protection for the ”natural features" of both land and water (Walls, 1986). Meridian township in lngham County has established protec- tion of groundwater recharge areas as a declared public purpose of land regulation. Overlay zones have been estab- lished to protect the groundwater supply in a time when the area is experiencing major development pressures (Harlowe, 1986). Thus, zoning as a form of factor ownership can be used to (1) prohibit uses which cause groundwater contamination, (2) allow certain activities under particular conditions, (3) limit the intensity of an activity, and (4) establish loca- tions for certain uses (Yanggen, 1984). gigggifiggtion Sygtgm. The proposed federal classification system is similar to the use of zoning, yet on a larger scale. Those geographic areas, aquifers, or portions of aquifers which are highly valued by society would be identified, and the actions of individuals would be restricted in the interest of protecting the high quality water. Differential protection of the aquifers would occur by tailoring regulatory require- ments to the class of the groundwater (Raucher, 1986). Tiered protection may be based on human activities affecting the r." 79 groundwater, existing quality levels of an aquifer, vulnera- bility to contamination, quantity of water drawn from the aquifer, as well other economic and social considerations. Thus, it would be more expensive to use highly sensitive aquifers for waste disposal rather than aquifers of lower quality. The public is actually creating different goods with different prices. Two basic problems may arise in regards to the level of protection afforded groundwater on the federal level. First, individual states will not be required to adopt the classification system (CEQ, 1984), thus there will varying distributional effects across the nation. Second, it is questionable whether an aquifer serving a small population will be considered of equal value to one which is the drinking water source for an urban area. Hence, agricultural communi- ties may bear the burden of this type of system. For rural groundwater sources in Michigan the protection to be extended by these classification systems may be limited. There are also theoretical problems confronting this system. To classify aquifers it must be assumed that future use of the water can be reliably predicted. However, desig- nating the type of aquifer use expected in the future may actually determine future use (Dycus, 1984). The changing needs of the populace may be difficult to accommodate once designations have been made. Another disadvantage of this type of system is that private polluters will not have to account for all of the costs they 1.. 80 impose on other individuals with their polluting activities. When the government allows degradation of particular aquifers, polluters can impose some of their costs of production upon the public (Dycus, 1984). The incentive to find less wasteful production practices, such as product substitution or recycl- ing of wastes, may be decreased. Connecticut has implemented a statewide groundwater classification system. The entire state has been mapped and classified according to four classes of groundwater. Problems are being confronted. A shortage of areas for waste disposal activities has arisen, as well as public resistance to the classification of areas for waste disposal or landfill activities. However, if the program goes as planned it is hoped that this problem will turn into an incentive for encouraging development of resource recovery facilities. This has yet to be discovered (NRC, 1986, pp.46-47). Consequently, in designing a classification scheme one must be aware of the possibility of both the postitive and negative distributional impacts upon the region. 5.2b Public Sells, Farmer Unwilling Buyer Under this situation, the farmer's right to use the groundwater is restricted by society's right to clean water. Farmers polluting the groundwater would be held responsible for the damages caused by the contaminant. Compensation for the public's loss of clean water would have to be paid by the farmer. This is very similar to the institutional structure 81 presently in Michigan. The public cannot force the farmer to stop polluting practices, yet the public can sue the farmer to pay for the damages imposed upon society. There are major problems with this type of property right rule, especially in deciding how much damage has been done, who caused it, and what should be the payment. There are large impediments to placing monetary values on health and in valuing the negative impacts to the resource. The difficulties with the present institutional structure in Michigan include; (1) the contamination may not be eliminated for a long period of time; (2) a large number of individuals may be affected; (3) it may be impossible to identify the polluter; and (4) local and state interests may conflict. 5.2c Public Unwilling Seller This situation represents the societal right to clean water with no compensation granted to those violating so- ciety's rights. The farmer can be forced to stop pollut- ing without compensation. Fines, or perhaps even jail sentences, would be imposed if this regulation were broken. Penalties. Regulations are imposed as a policy tool to change or redefine the options facing groundwater users. This is done in an effort to decrease the threats to society which can arise from differing uses of the resource (Libby, 1986). For regulations to be effective they must be enforce- able. How these costs are distributed within society will depend on the objective of the regulation, where funding lIIlIIIlI-Ilv. .ll .. 82 originates, and what level of government is involved (Libby, 1986). There are situations where regulation would be advis- able; such as a groundwater contamination case where the source of the pollution is fully known and regulation is easily enforced. The Dow Chemical Plant in Midland, Michigan is a good example. Toxins were being released into the Tittabawasee River by Dow Chemical. Regulating the pollution by continuous monitoring of the effluent leaving Dow Chemical pipes was a relatively easy policy process. In cases where the potential harm involved is proven and where it is techni- cally feasible to effectively monitor the activities of the polluting firm, regulation may be effective. However, it is questionable whether enforcement of fertil- izing practices could actually be an effective alternative to deal with nitrate contamination of groundwater. To continu- ally monitor the fertilizer a farmer applies to the land is very difficult, due to the high amount of transaction costs. The enforcement agencies in Michigan do not have a large enough staff as it is to monitor all farmers at all times (Kirkpatrick, 1986). Farmers would have to be account- able for their own actions, which in other pollution situa- tions has proven ineffective, such as recycling and disposing of toxic wastes. Hence, through this type of regulation the possibility of effectively decreasing the amount of fertilizer appears minimal and the taxpayers would bear the burden. 63 The rationale behind imposing the strict use of regula- tion to prevent contamination would be limited. Exclusion is basically impossible due to the high transaction costs involved. It would be impossible to monitor all people at all times. 5-2d Farmer Sells, Public Buys With this type of rule, ownership over the groundwater is given unequivocally to the private individual. The resource would be allocated through market bargaining, such as the use of subsidies. Market bargaining. Initially, the farmer would be given the right to use the groundwater in the manner he chooses. If he is creating an externality, such as groundwater contamina- tion, then those opposed to the externality have to bid to have it decreased. A market price would be put on clean groundwater. However, there are cases where ”market failure" could be expected due to the breakdown in perfect information, the high amount of transaction costs, and the existence of free riders. One way market bargaining has been used in land use planning, which may applied to groundwater protection, is through the purchase of development rights. A community purchases the development rights to property with the purpose of restricting intensive development of the land while allowing other specified uses such as recreation. The 84 prOperty is still under private ownership, with revenues being acquired through property tax assessments. Development rights have been used in many cases to preserve agricultural lands. Suffolk County, New York for example utilized this method. Farmers sold the development rights to the county in return for a payment and the right to retain title to the land (TCRPC, 1984, p.13). This easement program was successful in New York. However, it is not certain whether this type of program has been utilized to preserve groundwater recharge areas (TCRPC, 1984, p.13). Perhaps, the purchase of rights could prohibit growing high nitrogen consuming crops. The restriction would have to clearly specified so that monitoring of the use could be easily conducted. For example, restricting the amount of fertilizers applied would not be easily monitored, whereas exclusion of growing particular crops could be effective. Yet, in cases such as this where the market bargaining can be applied, the farmer will not necessarily respond to market signals which indicate there is a demand for groundwater management. He may choose not to sell the development right because the acceptable price is not being offered. Market signals may be masked or distorted. Individuals may feel that they need not pay for the resource, for they can benefit from the rest of society demanding clean water. The market price used to allocate the groundwater may not reflect the true environmental value placed on groundwater quality due to transaction costs and free riders. Thus, the demand may be 85 yneffective. A market approach would not necessarily elimi- nate the Pareto-relevant externality. When this occurs a second option for the individual or community affected by the contamination is to treat the polluted water. Raucher (1984) argues that in particular situations this is the most cost-effective method. Yet, DiNovo and Jaffe state, "Aquifer rehabilitation techniques are commonly used to minimize pollution from spills or other highly localized sources, but are not suitable for treating extensive pollution from dispersed sources or large contami- nant plumes. Aquifer rehabilitation is also extremely expensive and is never completely effective”. (1984, p.139) In Marion County, Indiana numerous private wells were contami- nated and construction of a public water supply system was found to be the least expensive alternative (DiNovo and Jaffe, 1984, p.139). Wisconsin's groundwater quality protection program includes a compensation system for people with wells that are polluted by man-made chemicals. The state has a no-fault program that will pay for 80% of the cost of replace- ment of their well regardless of the cause of the contamina- tion (NRC, 1986, p.72). Subsidies. The use of subsidies involves the public offering a market bid to farmers to stop contamination, such as has been used to stop erosion through the Conservation Reserve. A subsidy could be offered to farmers to decrease the amount of nitrogen fertilizers applied to their land. Farmers would receive subsidies if they agree to restrict 86 {he amount of fertilizer used. However, there are problems with enforcing the restricted use. High exclusion costs in monitoring the amount of fertilizer applied to the land makes implementation of this type of program questionable. Initially the rules of the subsidy may be followed, but as the individual realizes that increasing the amount applied by a minimal margin will most likely go unnoticed, the amount of fertilizer applied may slowly in- crease. Meanwhile, the subsidy is still being received. Programs could be established to educate the farmer on how the use of fertilizers will affect the groundwater. However, it is still questionable whether the rules of the subsidy would be followed. Social traps arise. A farmer may question whether he is the only person following the guidelines of the subsidy. He will be hesitant in believing that his water is not being polluted by his neighbors. Hence the rationale for continuing the nonpolluting prac- tices has disintegrated. For this reason it is doubtful whether a subsidy would have the desired result of decreas- ing the nitrogen leached to the groundwater. The price of noncompliance would be paid by the taxpayers. 5.2e Farmer Unwilling Seller, Public Buys This property rule gives the right to society to force the farmer to stop polluting, however the farmer must be compensated. The public has the right not to allow pollu- tion, while the farmer is given a liability right if he 87 is forced to change his present farming practices. The cost to society consists of the direct payment to the farmer plus indirect costs which are not as easily determined, such as identifying the polluter. Acquisition. One example of this fourth rule is the public acquisition of land where compensation is required. Through the use of eminent domain, authority is given for the public to spend funds to acquire land for public purposes, such as to protect a groundwater recharge area. In addition to the original cost to the public there will also be a maintenance cost for the land. The landowner is compensated for the acquisition of the land. Schenectady County, New York has used the public purchase of lands to protect critical recharge areas. The cost to the County to purchase these areas was estimated in 1980 to be $167,000 to $207,000. This represents a cost of approximately $4.85 to $5.85 for each home served by the protected water supply. The County reports considerable progress has been made in protecting the resource (DiNovo and Jaffe, 1984, pp.101-102). More complex variations of public acquisition are the transfer of development rights and easement purchases. As discussed previously, development rights involve the control of development in sensitive areas and permit develop- ment in other areas. Through an administering market, those who have the right to develop must reimburse those landowners who do not have the right. Easement purchases grant the 4271;? 7 7w}? ', L”:- g .2 Tm-‘puV-w’ ——~ 88 ;nflalic certain "use" rights over particular land attributes while leaving other rights in the hands of the landowner (TCRPC, 1984). 5.3 Education Educating the populace to the effect of private and public actions should be an element of any policy strategy for protecting groundwater. To effectively reduce groundwater contamination episodes, the public needs to understand why the problem exists, what are the causes, and how can they be decreased. This emphasis will be of value to a large range of audiences; school children, adults, policy makers, etc. Education is a very important facet to increasing the public's understanding to how their activities are harming the environment in which they live. A Nebraska Cooperative Extension program, for example, was the catalyst for reducing water usage by an estimated 1.5 million acres of water in 1983 by teaching farmers about irrigation scheduling (CES, Oct. 1985, p.30). Wisconsin attributes the success of its ground- water quality program in part to its strong information and education emphasis. The state has produced public information spots for television and radio, a groundwater teacher's guide for elementary schools, posters on groundwater and the hydrologic cycle, and several magazines on how groundwater problems are dealt with by state agencies (NRC, 1988, p.73). The community needs to be aware of existing and future pollution. It is imperative to convince the farmer of the PM Ste N99 “or Fada PPSVI 89 environmental problems imposed by misuse of nitrogen fertil- izers. Thus, an educational program should present these facts in an unbiased manner, allowing farmers to recognize the possible results of their future actions. 5.4 Recommendations As has been reviewed, recommendations to decrease ground- water contamination episodes can vary enormously across the spectrum of policy tools. Each method has a different set of costs and benefits, placing the costs of the policy on differing groups of individuals. A policy system needs to be designed to effectively deal with the given properties of groundwater, while recognizing the transaction and distribu- tional costs involved. Presently groundwater protection is a pot-pourri of laws and regulations without a coherent foundation to base policy decisions. Better coordination between those designing groundwater policy would aid in establishing a solid protec- tion program. To meet groundwater quality goals an institu- tional system must be developed where individual choices producing contamination become more expensive. An initial step must be to develop stiff land-use controls which will meet groundwater quality goals for present and future genera- tions. In developing protection programs for groundwater, nondeg- radation alternatives should be emphasized; focusing on preventive versus reactive methods (actions occurring after 90 the groundwater has been contaminated). This form of policy has proven, in cases of nonpoint source pollution, to be the most cost effective. Protective measures should insure a quality of groundwater naturally clean enough for human consumption. Only a few states follow a nondegradation groundwater policy, and it is often found that an amount of discretion is necessary to make the policy more politically and economically feasible. Minnesota's Pollution Control Agency, for example, has the discretion to consider certain social and economic factors in decision making (GLWRPC, 1986, p.33). The State of Wisconsin originally established a policy of non-degradation for their groundwater resource. They have since then noted, "In recent years...the state has moved toward the recognition that some contamination of groundwtaer is almost inevitable in modern, industrial society” (Yanggen and Webendorfer, 1984, p.12-13). Hence, a pure nondegradation policy may not be possible, yet due to the extreme costs and time consuming measures for the aquifer to be cleansed a preventive pollution strategy should be emphasized. The Great Lakes and Water Resources Planning Commission has recommended that Michigan implement a policy of nondegradation (GLWRPC, 1986). This would be even more effective nationally. 91 5.4a Regional Land-use Planning Land use planning on the regional or local level can be a significant asset to groundwater quality control. Groundwater recharge zones ignore political boundaries, thus contamination problems are often confronted regionally. Coordination among all levels of government is imperative. Yet, the policy tools to regulate land use exist predomi- nantly on the local level. Establishing jurisdicational boundaries on the regional level is economically logical. Decision units remain small and the population is more homogeneous, transaction costs and information costs will be reduced in obtaining majority decisions. Through the use of local level planning commis- sions, the inherent transaction costs of federal or state controls can be decreased. The preferences of the community can be focused upon in order to coordinate goals and objec- tives with the desires of the public. The National Research Council reports that in many states, local authority has been more effective in controlling groundwater pollution problems than state authority. County and municipal ordinances controlling underground storage of gasoline were in place in Cape Cod, Massachusettes, Long Island, New York, Dade County, Florida, and Santa Clara County, California, one to five years before state or federal laws were enacted (NRC, 1988). In New England an initially successful groundwater protec- tion strategy has been established by a group called Rural New 92 England, Inc. They have developed a groundwater protection strategy for rural communities which concentrates on local officials governing the allocation and protection of ground- water (George, 1985). The program is based on active citizen participation. They conclude that local government, which often does not have access to financial and professional resources, should take advantage of low and no-cost resources such as volunteers, community based service organizations, universities and retired professionals (George, 1985). The jurisdictional boundaries reduce the costs which the public would pay if control was on the state or federal level. The Great Lakes and Water Resource Planning Commission recommends that the utilization of local agency staff be emphasized in Michigan's groundwater protection. They state, ”Current staffing for these programs at the state level is not adequate. By utilizing local agencies to close these gaps in groundwater protection and management, more control over potential future sources of contamination will be obtained" (1986, p.28). Groundwater quality should be identified as the specific objective of policy programs, in order to increase awareness of the relationship between land uses and water quality (Yanggen and Webendorfer, 1984). The public should be included in developing and implementing protection programs. Since nearly all activities affecting groundwater quality are tied closely to land use it is important to achieve public 93 recognition of the problems and methods which can decrease contaminating episodes. 5.4b Cross-Compliance: Groundwater Reserve and Groundwater Buster Programs A policy program which could be effective in protecting the groundwater in the long run against agricultural source contaminants should focus on the relationship between agricul- tural policy and groundwater policy. The economic and political climate in the U.S. over the last decade has pushed large numbers of American farmers to cultivate their land as intensively as possible, using all their means to get that extra dollar (Bonnen, 1988). Yet, while farm policy works in the short run, with the on-going effort to stabilize farm income, environmental quality is inherently a long term project. There is a significant need to develop compatibility between groundwater policy and farm policy. This could be done by establishing cross-compliance between the two policy areas. My recommendations include two national programs which would be used concurrently; a Groundwater Reserve and a Groundwater Buster Program. An easy comparison can be made between these programs and the Soil Conservation Service's Conservation Reserve and ”sodbuster" programs, which were initiated in the 1985 Farm Bill.‘ These suggestions aim to 3 A large parallel can be drawn between eroding soils and polluted groundwater, both due to farm management practices. Questions of property rights and uncertainty are inherent, and each resource is considered "common property" by the general public. 94 develop a program where exclusion of polluters is possible and information costs are decreased while focusing on the inter- dependencies between users. Groundwater Reggrvg Program. The objective of the Ground- water Reserve Program would be to establish a protection system for groundwater by identifying those aquifers which are vulnerable to contamination from agricultural practices, and providing incentives for lands above the aquifer to be taken out of production. Removing this land from production would allow the natural waste assimilating capacity of an aquifer to occur. The Cabinet Council on Environmental Protection suggested there is a ”...need to take out of production, or other intensive use, particularly troublesome lands ... for the protection of environmentally sensitive areas such as ... groundwater recharge sites" (1984, p.17). The Great Lakes and Water Resource Planning Committee also recommended that public acquisition could be used as a policy alternative to influence and enhance protection of the groundwater resource (GLWRPC, 1986, p.29). Consequently, this program would offer incentives to farmers which would alter the options they face, by bringing long term groundwater protec- tion goals into the short run attention span of the farming community. The Groundwater Reserve Program would be implemented to protect groundwater. Through a classification system those lands above aquifers in peril of contamination from 95 agricultural practices could be specified nationally. A federal program could then be established to offer incentives for farmers to take those lands out of production for a specified number of years. Not all of the target lands would be removed, yet by taking out a proportion of the land above an aquifer, the probability of contamination naturally decreases (King, 1988). The incentive for land to be taken out would be established through a bidding system, with ownership granted to the farmer and the public paying for the use of the water.‘ Farmers would submit a bid for annual rental payments from the federal government, for a designated number of acres. A monetary limit per year would be established which could not be exceeded. Also, not more than 25 percent of the land in any county could be bid into the program, thus diminishing negative impacts on agriculture related industries or busi- nesses. The expense to the federal government for the program could be offset to a degree by reduced payments through the Commodity Credit Corporation, as the land is removed from commodity programs.8 ‘ This follows Rule ll, Situation A discussed earlier in this chapter. The farmer is protected by the property right, and the public can only obtain this right by paying for it. 5 This is how the expenses are being managed with the Soil Conservation Reserve Program (USDA, 1986). The lands to be taken out of production would not necessarily be correlated to the crops produced but to the physical characteristics of the land. Hence, a wide variety of commodity programs may be affected (Quissenberry, 1988). 96 However to overcome some of the problems which can be foreseen with a bidding system, such as discussed in section 5.2d, the rights to the water should be slightly altered. If lands are not bid out of production then regulations would be imposed, such as increased taxes upon the land. The taxes would make it more expensive for the farmer to continue degrading the groundwater. The farmer's decision making would be held in boundaries by government jurisdiction. Thus, a cross-compliance option would be an integrated set of positive and negative incentives. As the land is taken out of production it should still be managed in such a way that conservation of the natural resource is the primary concern. It could be specified that during the contract period many acres be planted with trees, which do not require nitrogen fertilizers. Studies have shown that farmers do not tend to convert these lands back to row crops quickly (USDA, 1986). Hence, the contaminating activities in the long run will be decreased. Groundwater Buster Program. The objective of the Ground- water Buster Program, which would be implemented in conjunc- tion with the Groundwater Reserve, would be to restore the water quality of contaminated aquifers. The program would provide a strong incentive for farmers to discontinue the production of harmful crops above a contaminated aquifer until the aquifer recleanses itself.‘ The program would eliminate ‘The time needed would be decided on a case-by-case basis, perhaps being infinite, depending upon the extent of contamination and the hydrological conditions of the aquifer. 97 Federal incentives to those farming land above a contaminated aquifer. Farmers would become ineligible for benefits of certain USDA programs, such as price supports, crop insurance protection, or FmHA loans, if they planted particular crops known to need high levels of nitrogen fertilizer on designated lands. A linkage between agricultural policy and groundwater protection policy would be established. By eliminating the eligibility of owners and operators of lands above a contaminated aquifer from various benefits, the cost to this group for keeping their land in production would increase. Residual benefits of the program could include creating better habitat for wildlife, and aiding in adjusting the production of some agricultural commodities which are now currently in surplus, such as wheat, corn, and small grains (USDA, 1988), if those were the lands taken out of production. National standards for nitrate levels in groundwater could be established. Thus, the land required to be taken out of production would be those above aquifers which have nitrate concentrations exceeding the stated national stan- dards.’ The amount of land to be removed would be based 7 Wisconsin has implemented groundwater standards which could be used as a working example for these national stan- dards. Groundwater protection standards have been established on a two-tiered basis; an ”enforcement standard" and a "preventive action limit”. Enforcement standards define when a violation has occurred and preventive action limits function as a warning level, stating the possible need for government involvement (Patronsky & Bogar-Rieck, 1984, pp.7-8). For this research two national levels could be established similar to the Wisconsin standards. An enforcement standard when violated would show just cause for the ”Groundwater 98 on technical information regarding how much is needed in order for an aquifer to be able to cleanse itself. This must be dealt with on a case-by-case basis, the amount would depend on the individual circumstances. The land to be removed must be evenly distributed as a proportion of each farm over the aquifer harvesting crops requiring nitrogen fertilizers. If 10% were the designated amount to be removed; a farm of 100 acres would remove 10 acres, a farm of 1000 acres would remove 100. For this method to be effective, farmers must not increase the fertilizer applied to the acres remaining in production. Assuming that they will not be receiving an increased profit from the land taken out of production it would be expected that the farmer will not have the finances to increase usage, especially in regards to the financial situation of the 19805. The Cooperative Extension Service or Soil Conservation Districts could be employed to aid farmers in finding other uses for their land while it is out of production. The land could be managed as wildlife habitat, allowing it to develop naturally or by planting trees on the land. Farmers could then lease the property rights to the land for alternative purposes, such as hunting. In Michigan, contracts are presently established where a farmer makes an agreement with the state for his land to be used for hunting. The farmer then gets paid, by the state, from $2.00 to $6.00 per acre Buster" program to be implemented. If a preventive action limit was reached, the cropland would qualify for the Ground- water Reserve program. 99 per hunting season for the use of the land (Wood, 1986). Another alternative is for the farmer to directly rent the land to an individual hunter or hunters; bargaining would established the price paid. This also occurs in Michigan (Wood, 1986). Therefore, a farmer can still maintain some income off of the land through a noncontaminating method. It can also be stated that the land would not have to be taken permanently out of production. Rotation schedules could change, for example, such as cultivating the land only one year in six. This would provide the farmer with income off of the land while decreasing the nitrogen on the soil. This method has been used in England to decrease the fertil- izers used on the land (O'Donnell, 1986). Farmers could also change their production to those crops which are nitrogen-fixing or do not require nitrogen fertilizers for production, such as alfalfa or most legumes (Quissenberry, 1986). Thus, continued cultivation of the land would not harm the underlying aquifer. If these crops are allowed, there may be a large influx of legumes on the market, and those individuals whose crops were already in this production could be negatively impacted by this program. This would have to be dealt with. Bgaring thewburdgg. Who would bear the costs of these two programs? With the "Groundwater Buster" program, it would be borne by the farmer whose practices have contaminated the water. If he chooses to keep his land in production, he will bear the burden as he loses his commodity benefits 100 (those using the groundwater aquifer will also still be affected by contamination). By taking the land out of production, he can regain some of his profits by using the land for other means, such as wildlife habitat or by changing the type of crops he harvests. For those farmers enrolling in the Groundwater Reserve program, the burden would be shared between the farmer and the taxpayer. Yet, it can be expected there will be taxpayers who are unwilling riders; those prefering not to pay for the clean water. Proper management of the groundwater would be a positive action for both sets of individuals. Success of the policy will depend upon the distribution of participants actively involved in the programs. Education. To meet the objectives of these programs in the long run, educating the public about groundwater contamina- tion should be emphasized. A survey of Michigan Cooperative Extension programs identified education as an important asset for having a positive impact on alleviating ground- water contamination. Education in the proper management of fertilizers and pesticides was found to be the most impor- tant element in efforts to decrease contamination. Also identified as important topic areas were: human health effects from contaminants; best management practices to protect groundwater; and water quality testing and results interpretation (CES, 1986). Used in conjunction with the Groundwater Reserve and Groundwater Buster programs, education should be used to 101 increase the farmer's awareness of the effectiveness of changing land management practices to decrease the amount of nitrates leached into the water. Educational programs should focus on changing farmers' perceptions of the problem, illustrating the negative impacts of their actions. These programs need to present facts in an unbiased manner, provid- ing justification for the use of strict management practices. Even farmers who recognize that they need to protect the groundwater beneath their land may not be sure how to do so effectively and cost-efficiently. Farmers can be under- standably reluctant to invest in methods that they perceive as ineffective. Education should bring the health concerns of society to a personal level, and alleviate much of the uncertainty which engulfs this issue. The intentions of an educational program should be to impress upon the farmer that; 1. A groundwater quality problem does exist with detrimental private and public consequences. 2. The problem can be directly associated with the farmer's current behavior. 3. Feasible solutions, both economically and agronomi- cally, are available. To meet each of these objectives will require varying styles of presentations to different target audiences. By changing the individual's perception of the problem. information can be used as a tool to encourage public participation in groundwater protection policy. However, increased education will not solve the problem of free riders. The opportunities 102 sets of these individuals must be altered by the other incentives. The benefits. The Groundwater Reserve and Groundwater Buster programs would remove agricultural land from produc- tion which is or may be contaminating the groundwater. The benefits of these programs together would be to; (1) Reduce the chances of groundwater contamination and allow the groundwater to assimilate the waste already present; hence, overall increasing the water quality. (2) Through increased education, long term goals of improved water quality would be more easily met by changing behavioral patterns. (3) Wildlife habitat would be improved. (4) The production of commodities would be reduced, thus decreasing the expenses of ongoing commodity programs. Enforcing these two programs should not be a problem; aerial photographs could be used. Pictures of the landscape could be routinely taken to monitor the development of the land. Agriculture production on the designated land would be easily noticed. This enforcement characteristic is a significantly positive aspect of the programs, due to the fact that many policy recommendations for nonpoint source contaminants are extremely difficult to effectively monitor. These programs would initiate consistency between ground- water policy and farm policy. If the government is paying the farmer for crop reductions, in the form of subsidies, extern- alities to the environment should not be part of the package also. Government needs to change the bidding process so it is paying for what is desired. By paying a price higher than the farmers reservation wage the government is actually creating a 103 problem with one incentive, commodity programs, and trying to solve it with another, groundwater policy programs. The two should be linked. An incentive should be given for agricul- tural producers to consider the external effects of their management practices. The Groundwater Buster and Groundwater Reserve Programs would begin to set needed priorities for groundwater protection. 5.6 Summary Consequently, in Michigan today management of the ground- water is through a process of adjudication. There are problems with this system which suggest that direct government involvement is a necessary measure to be taken for groundwater protection goals to be met. A variety of policy tools could be implemented, such as subsidies and taxes, however with most of these measures there would be policing difficulties and large transaction costs in implementation. The policy recommendations for protecting and managing groundwater made in this chapter were based on the probable effectiveness of meeting societal goals. Implementing a national "Groundwater Reserve" and "Groundwater Buster" program would provide incentives to farmers to take land over a vulnerable or contaminated aquifer out of production. In conjunction there should be an emphasis on the increased use of education in order to meet long term groundwater protection goals. It is imperative to form a strong national groundwater quality 104 program which focuses on protection and management, in order to meet national goals for protecting the natural resource. Chapter 6 APPLICATION; MONTCALM COUNTY, MICHIGAN This chapter discusses the groundwater quality situation found in Montcalm County. Throughout this study groundwater contamination has been discussed on a broad base level, yet the issues are relevant to the more specific problems of individual regions. Analyzing information on nitrate contami- nation of groundwater in Montcalm County provides a working example for applying the conceptual framework to a particular region. The purpose of this research is not to provide specific prescription for the county, but instead to provide useful information to those decision-makers designing policy to meet the goals of the community. 6.1 Montcalm County Montcalm County is located in the west-central part of the Lower Peninsula of Michigan (Figure 6.1). The total area of the county is 710 square miles, with a population of approximately 50,000. The primary industry of the area is agriculture, with potatoes, dry beans, oats, barley, and wheat as principals (Espie, 1985). Montcalm County is Michigan's leading producer of potatoes, producing more than one-fifth of Michigan's entire potato crop (USDC, 1986, p.1). 105 106 Figure 6.1: Map of Michigan Montcalm County highlighted in blue 107 Concerns for high nitrate levels found in the ground- water have increased over the last five years. Approximate- ly 50% of the county is situated over unprotected aquifers (Figure 6.2), and an estimated 80% of the population depends upon the groundwater for their drinking water supplies (Selden, 1986). Public Health officials are concerned that these drinking water supplies will be disrupted as nitrate levels increase within the county (Selden, 1986). At this time, Montcalm Public Health has reported over 250 wells with nitrate levels higher than the public health standard of 10ppm (Selden, 1986). The largest percentage of these contaminated wells are located in areas where the soils have sandy loam and loamy sand characteristics (Figure 3). In Montcalm County nitrate contamination is being attri- buted to extensive agriculture activities, where the aquifers are vulnerable and nitrogen fertilizers are used in amounts greater than needed by the crops (Smucker, 1986; Selden, 1986). In 1984, a Michigan State University study analyzed three locations within Montcalm County for the probability of fertilizers leaching into the groundwater. All three loca- tions showed a pattern that indicated the potential to lose nitrate from the soil (Ellis, 1984). High quantities of nitrate were found late in the growing season when plant uptake of nitrate is greatly diminished, indicating that the soils will allow the nitrate to move down to the groundwater during the fall and winter months (Ellis, 1984). ..r AQUIFER VULNERABILITY MO NTCALM CO. PROTECTED UNPRUIECTED UNCLASSIFIED Aquifer Vulnerability: Montcalm County Center for Remote Sensing, Michigan State University, East Lansing, MI, ize< con' higl ShOl and conl COI‘I’ incl samp 31.9 1986 109 A second Michigan State University study has used computer- ized mapping to illustrate potential and present groundwater contamination areas within Michigan. Montcalm County has been highlighted within this mapping system in Figures 6.4-6.6, showing groundwater nitrate levels from 1933-1970, 1971-1974, and 1975-1984. The maps show increasing areas and levels of contamination over time, centering around the northwestern corner of the county. These maps confirm concentration levels up to 7 ppm, yet County health officials have reported incidences of nitrate levels much higher. Of the wells sampled nitrate levels range within the County from 0 ppm to 31.9 ppm, with an estimated average of 4-6ppm (Selden, 1986). These levels have all been increasing; not a single case has been reported where nitrate levels have decreased between samplings (Selden, 1986). By comparing Figures 6.2, 6.3, 6.6, and 6.7, one can see that the aquifers with high nitrate levels are primarily underlying agriculture land consisting of sandy soils. These aquifers are also those most vulnerable to contamination. This supports the hypothesis of both the Cooperative Extension Service and the District Health Department that agricultural practices upon vulnerable areas are one of the leading causes of nitrate contamination of groundwater within the county (Smucker & O'Donnell, 1986; Selden, 1986). uman health effects. Concern for protecting ground- water in Montcalm County arises from the possible ill-health effects associated with contaminated water. Within the county 110 .cmmuzoaz {3:300 Emoucoz .mou>umm comvm>ammcoo :om "00.50 .m masuuu l..- 1x.‘1.n.vl..... I. .t.f¢l.1...s . .. ..li; ... ‘3 .1... 3.1 .1. .....I...,-. I: ... ...-......i ...... I .. \l .v... 3 cl: :1! ....v .1.:.a'lx. {flit-.35.. .r. Iii-{nae 6!. v1.5. . ...! 1.... 3:31.. ft.) .II. .3: I. 6.) ...! :01. .31... l 01.... ......i- ... ..l. . {flint-.... 3.: .1: 7. i... .10 v1... {:3}. l ...: ....x 2)....2 ...-i .....ii :1! l a... 1;... 3|... ... . 3.. v . :3... 1...: .- ...-5.1. . 1.1.... .....1 Jlujllfijlq m Etnaiaaaa ‘ . Z