Chesapeake Bay Foundation releases report on environmental investments and the economy

DELMARVA (Story by Hannah Cechini, November 2, 2022) – Investing in conservation practices can boost the local economy, according to a new report released by the Chesapeake Bay Foundation (CBF).

By the Blueprint

In 2010, the Environmental Protection Agency (EPA) and Bay-area states began work on the Chesapeake Clean Water Blueprint. The plan includes goal limits for how much nitrogen, phosphorous, and sediment is permitted in the Cheaspeake Bay; pollutants that the CBF says often come from agriculture.

While the Blueprint has an implementation deadline of 2025, CBF Senior Scientist and Agricultural Policy Director Beth McGee says long-term watershed implementation plans are trudging along. That’s why the CBF is encouraging two-year milestones.

“One of the failures of pollution reduction efforts in the past, and Bay restoration efforts, were long term goals that not being achieved. So, the two year milestones are the way that the states divide up the tasks,” said McGee.

While the EPA is tasked with holding states accountable on developing watershed implementation plans, McGee says about 90% of the remaining pollution production needs to come from the agricultural sector.

“What our study looked at is what are the economic impacts of implementing those practices by 2025, in terms of the jobs that are created, economic effects on sales and earnings in local, rural economies,” said McGee.

Investing in the Environment

Now, environmental organizations are urging state and federal government, and farmers to invest in protecting the environment. That’s where the CBF’s new report comes in, says McGee.

“The results indicate that investing in these conservation measures isn’t just good for the environment or good for the farmers; it also brings quantifiable economic benefits to local, rural economies,” said McGee.

According to the report, for every $1 invested in agricultural conservation practices, there is a $1.75 economic return in terms of additional sales, goods and services, and higher earnings for workers. McGee says those investments would also support additional 6,673 jobs per year.

Although, McGee admits that not every conservation practice is equal in terms of how effective they are.

“Conservation practices are not equal, in terms of their pollution reduction capabilities. For example, waste storage, which is a very expensive practice that we are implementing to achieve our clean water goals, on average takes about $2,000 to reduce a pound of nitrogen,” said McGee. “But, if you compare that to forested buffers, it’s a much better deal. They cost a little over $7 per pound in terms of reducing nitrogen pollution. But, they provide many other benefits like carbon sequestration, flood mitigation, and habitat for wildlife.”

State and Federal Help

A big part of the puzzle of balancing environmental protection and boosting the local economy is getting state and federal funding to fill in the gaps, says McGee. That’s why the CBF is urging the United States Department of Agriculture and Congress to add onto the money available.

“We have a great opportunity in the recently passed Inflation Reduction Act, which provided a $20 billion boost to conservation practices. We’re hopeful that many of those dollars will flow to our region,” said McGee. “As the report demonstrates, this investment will not only achieve our clean water goals, provide climate resiliency, but will also bring economic benefits to the region.”

As farmers already operate on thin margins, the CBF says they can help cover most, if not all, of the cost farmers will face.

“Most of the federal and state programs do have cost share programs. It’s a cost share between the farmer and the government, whether it’s federal or state,” said McGee. “The rates for that can vary. Often, 75% is covered by the government, and 25% by the farmer.”

However, sometimes those rates can be even higher. McGee says certain federal programs allow cost share up to 90%. In addition, incentive and grant programs can even go as far as to cover the full cost, she says.

Stream Exclusion in Virginia

The CBF says there are a number of best management practices (BMPs) that farmers can take advantage of when making such investments.

Matt Kowalski, Virginia Watershed Restoration Scientist, has been working with farmers across the commonwealth to help them implement the changes. Specifically, he has his eye on stream exclusion.

“By keeping the livestock out of surface waters and other sensitive features like wetlands, you’re keeping the nutrients from their urine and manure out of the water. You’re also eliminating stream bank erosion from the livestock themselves,” said Kowalski.

One way to keep the livestock out of the waterways is to build fences. Kowalski says doing that would not only protect the environment, but return that investment to the local economy. For example, he says more jobs could come out of lumberyards where fencing materials are made. In turn, Kowalski says there could be an uptick in sales at stores that sell such materials.

“That can be anything from high tensile wire, woven wire, and all the various fence accessories that are used to fully complete construction of that fence,” said Kowalski.

And, Kowalski says those return investments will then be found back on the farms.

“Most of the time when we see these projects go in on a farm, it’s not the farmers themselves that are doing the construction of the fence. They typically hire a local contractor that comes in to do that work,” said Kowalski. “Local contractors building the fences will hire staff. They’re going to buy equipment, they’re going to go to local businesses to buy things like vehicles, equipment, and have those things maintained, as well.”

Prescribed Grazing in Maryland

Meanwhile across Virginia’s northern border, Maryland Restoration Scientist, Rob Schnabel, is working with farmers to encourage prescribed grazing. It’s a practice where farmers rotate their grazing livestock from pasture to pasture. Schnabel says this helps to let the lands recover, and also helps farmers expand their products.

“Many of the farmers that we’re working with are actually converting corn and soybean fields, monoculture fields, into permanent, diverse cover pasture, which is really a critical practice for water quality,” said Schnabel.

This practice also boosts the local economy, says Schnabel.

“The job creation that happens as farmers make this transition from monoculture corn fields to pastures is all the seed companies. You’re not just planting one grass. You’re actually planting a salad bar of sorts that the animals pick and choose based on their nutritional needs,” said Schnabel. “Then, you have contractors installing the water systems. At times they’re drilling new wells to provide water access, or they’re providing the pipelines.”

Gathering Data

Report Lead Author and Senior Economist  for Key-Log Economics Carolyn Alkire says the process of compiling the data was exhaustive.

First, she and other researchers identified 17 agriculture BMPs. For each one, they obtained the level of implementation needed by the 2025 deadline for the Blueprint. Researchers then used CBF’s Chesapeake Assessment Scenario tool to figure out how much it would cost to implement each practice. Alkire says additional data was collected from the Department of Agriculture.

Economic impacts of implementation were then estimated by using a regional input-output modeling system from the Bureau of Economic Analysis, says Alkire. The model estimates economic impact of changes in purchases on regional industries in terms of sales, goods and services, jobs, and earnings. Multipliers were added to average annual implementation costs for each BMP to calculate the total direct, indirect, and induced economic impacts.

“The direct impact of an increase in forest buffers would be more jobs for people who are planting the trees. An indirect impact would be jobs for nursery workers, because the tree planters would buy the seedlings from the nursery. An induced impact would be more jobs in the grocery stores, where tree planters and nursery workers buy their food,” said Alkire.

To read the full report, click here.