Integrated assessment of cost-effective water quality improvements in the Minnesota River Basin: Combining stated preferences and simulation-optimization approaches

Authors: LANG, ZHENGXIN - University Of Washington; RABOTYAGOV, SERGEY - University Of Washington; HANSEN, AMY - University Of Kansas; Dalzell, Brent; CAMPBELL, TODD - Iowa State University; TAO, JINGJING - University Of Washington

Submitted to: Environmental Management
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 4/25/2025
Publication Date: 5/10/2025
Citation: Lang, Z., Rabotyagov, S., Hansen, A., Dalzell, B.J., Campbell, T., Tao, J. 2025. Integrated assessment of cost-effective water quality improvements in the Minnesota River Basin: Combining stated preferences and simulation-optimization approaches. Environmental Management. Article s00267-025-02179-1. https://doi.org/10.1007/s00267-025-02179-1.
DOI: https://doi.org/10.1007/s00267-025-02179-1

Interpretive Summary: In agricultural landscapes, a variety of conservation options are available in support of the goal of improving environmental quality while maintaining agricultural productivity. The effectiveness of conservation practices is not uniform across the landscape, so there is a need to locate conservation actions in targeted areas in order to make effective use of limited conservation funds. Additionally, farmer willingness to participate in conservation programs can change based on social attitudes. This study combines the consideration of conservation practice effectiveness with farmer survey response data to identify scenarios to improve environmental quality in the Minnesota River Basin. While they can be expensive to implement, wetland restoration scenarios are among the most cost-effective in terms of their overall capability to reduce both sediment and nitrogen pollution in the Minnesota River Basin.

Technical Abstract: Voluntary incentive programs are central to U.S. agricultural policy, aimed at enhancing sustainability by improving environmental outcomes and increasing the supply of non-market ecosystem services. This study integrates econometric insights with biophysical modeling to identify cost-effective strategies for nitrate and sediment reductions at the watershed scale. Survey data from Minnesota River Basin farmers characterizes willingness-to-accept (WTA) distributions for wetland restoration ($400/acre), cover crops ($14/acre), and nutrient management ($106/acre). A mixed logit model reveals significant heterogeneity in WTA, influenced by income, farm size, political leanings, taxes, water impairments, and non-pecuniary factors like ecosystem service appreciation, conservation experience, and stewardship. Integrated modeling highlights fluvial wetland restoration as a cost-effective and impactful strategy. Up to a 43% nitrogen reduction and 82% sediment reduction may be attained at an annual cost of under $10 million through targeted conservation investments. Scenarios with lower costs ($5 million annually) achieve substantial sediment reductions (82%) but limited nitrogen reductions (22%), demonstrating the utility of multi-objective optimization frameworks to elucidate optimal trade-offs in watershed planning.