• watershed management;
  • cost minimization;
  • water quality;
  • economics;
  • pollution modeling;
  • nutrient trading;
  • water policy;
  • non-point pollution;
  • linear programming

ABSTRACT: Linear programming is applied to identify the least cost strategy for reaching politically specified phosphorus and total suspended solids reduction targets for the Fox-Wolf river basin in Northeast Wisconsin. The programming model uses data collected on annualized unit reduction costs associated with five categories of sources of phosphorus and total suspended solids discharge in each of the 41 sub-watersheds in the basin to determine the least cost management strategy. Results indicate that: (1) cost-effective nutrient reduction requires careful selection of geographic areas and source categories to address throughout the watershed; (2) agricultural sources are the most cost-effective to address in the basin; and (3) care should be exercised in setting nutrient reduction targets, given that there are likely to be significantly increasing marginal costs of nutrient reduction; the model predicts that lowering the most restrictive target by 33 percent would cut reduction expenditures by about 75 percent. Policy implications of the model include support for the investigation and potential development of institutional arrangements that enable cost-effective nutrient reduction activities to occur, such as the creation of an agency with authority over a given watershed, coordinated watershed management activities, or nutrient trading programs.