Milking Nature's Bottom Line

Milking Nature’s Bottom Line A Full-Cost-Accounting of Proposed CAFO Operations in Jo Daviess County, Illinois Landen Consulting Appreciating Nature’s ValueSM Milking Nature’s Bottom Line A Full-Cost-Accounting of Proposed CAFO Operations in Jo Daviess County, Illinois Eric Landen and David Propen [email protected] Landen Consulting Appreciating Nature’s ValueSM c h i c a g o • S ã o p a u l o Please cite as: Landen, E., Propen, D. (2012) Milking Nature’s Bottom Line: A Full-Cost-Accounting of Proposed CAFO Operations in Jo Daviess County, Illinois Landen Consulting Copyright ©2012-13 Landen Consulting All Rights Reserved Typography & Design Peter Fraterdeus Galena, Illinois This report has been prepared on behalf of, and is dedicated to, the land and people of Jo Daviess County, Illinois. Special thanks to Matthew Alschuler and the h o m e s organization. Contents Air & Water Quality – impacts on other ecosystem services (nature-based tourism & recreation, cultural & ethical values) Global climate regulation (ghg emissions): 1 Executive Summary Biodiversity (endangered/threatened species as a driver of nature-based tourism) 3 The Integrated Accounting Approach Cultural & Ethical Values: Nature/ecosystem impacts on property values and associated tax revenues 5 Regional Context Cultural services: recreational fishing & wildlife watching 6 Our Approach For This Study 27 Cultural & Social costs Cultural & ethical values: Environmental identity and the 6 CAFO Risk Model psychological health of the community Freshwater provisioning – Water Table Draw-Down Cultural & ethical values: The socioeconomic impacts ofca Fos Freshwater Provisioning – damage to regional water quality to the regional economy Air Quality – onsite (worker disease risk) Cultural & ethical values: The cost to society’s built capital Air Quality – regional (respiratory health) Cultural Services – Existence value Air & Water Quality – impacts on other ecosystem services Summary of costs (nature-based tourism & recreation, cultural & ethical values) 33 Economic Benefits Global climate regulation (ghg emissions) Employment, Spending and Tax Revenue Biodiversity (endangered/threatened species as a driver of nature-based tourism) 34 Conclusion: Putting Nature on the Balance Sheet Cultural & Ethical Values: Nature/ecosystem impacts on What’s next property values and associated tax revenues Cultural services: Recreational fishing & wildlife watching 36 Future Research Topics Cultural & ethical values: Environmental identity and the psychological health and cultural fabric of the community Cultural & ethical values: The socioeconomic impacts of caFos to the regional economy Cultural & ethical values: The cost to society’s built capital Cultural Services – Existence value 22 Environmental Costs of the TID CAFO Freshwater provisioning – water table draw-down Freshwater provisioning – damage to regional water quality Water purification and waste treatment Air Quality – onsite (worker disease risk) Air Quality – regional (respiratory health) Tables Table 1. The Balance Sheet 1 Table 2. Estimated WTp to avoid a 1% decrease in water use 14 Table 3. Responses to elevated nitrate-nitrogen in MN study: All well owners. 24 Table 4. Estimated WTp to prevent 1 mg/L increase in BoD and Ammonia 25 Table 5. Tourism Revenue Impact from 1% Decrease in Recreation Area Attendance 28 Table 6. Tourism Employment Impact from 1% Decrease in Recreation Area Attendance 28 Table 7. WTp to avoid a decrease in T&E fish species 29 Table 8. WTp to avoid a decrease in T&E marine species (otters and mussels) 29 Table 9. Estimated Property Value and Tax Revenue Losses by Village 29 Table 10. Total Cost from Lost Productivity Time due to Depression 30 Table 11. Summary of Ecosystem Service Unit Impacts and Associated Costs in 2011$ 31 Table 12. Estimated Local (In-State) Investment from Subcontracting 32 Table 13. Estimated Investment Costs for 2 TiD caFos 33 Table 14. Economic Benefits from TiD 34 Table 15. The Balance Sheet 35 Figures Figure 1. The rolling hills of Jo Daviess County (P.Fraterdeus) 1 Figure 2. Images from (hoMES 2008; Brunwasser 2011) 5 Figure 3. Illinois Estimated Aquifer Yields 8 Figure 4. Sunnyside caFo Project Area 10 Figure 5. Aquifer Sensitivity Map, Jo Daviess County, Illinois 11 Figure 6. Major Watersheds of Illinois 12 Figure 7. TiD caFo Ten Mile Impact Radius 26 Figure 8. Fish kill in Little Bear Creek, Michigan 27 We would like to extend our thanks and gratitude to the following people who contributed to this report, either with direct content input, suggesting research and information sources, improving the final product with a thoughtful review, or otherwise contributing their energy and expertise: Arthur Landen Sr.; Lynn Henning David Edwards, International Sustainability Unit Bruce Yurdin and the Illinois Environmental Protection Agency Trent Thomas and theIllinois Department of Natural Resources Tovar Cerulli; Molly Anderson; Doug Constance Jessica Dexter and the Environmental Law and Policy Center Debbie Hammel and the Natural Resources Defense Council Danielle Diamond and Illinois Citizens for Clean Air and Water David Groenfeldt and theWater-Culture Institute Sandi Helgerson and the Jo Daviess Conservation Foundation Susan Clayton; John Ikerd; Jerry Adelmann; Susan Turner Michelle Perez and the World Resources Institute Angela Larsen and the Alliance for the Great Lakes Tim Hollein and Loyola University Chicago Pete Hardin Executive Summary Table 1. The Balance Sheet 1 Overview One-Time Benefits Annual Benefits An “industrial mega-dairy” (named Tradition $7,012,403 $2,115,400 Investments, LLC or Tradition Family Dairy, LLC) Avg. One Time Cost Avg. Annual Cost is attempting to site itself in the rolling hills of Jo ($9,307,508) ($7,187,073) Daviess County, a picturesque region of northwest Net One-Time Impact Net Annual Impact ($2,295,105) ($5,071,673) Illinois, U.S.A., with a unique geology, geography, and ecology. The region retains a strong small- family-farming traditional rural identity. The The Integrated Accounting Approach project has been the subject of much controversy, In the past, economic progress was measured with numerous objections having been raised on purely in production-driven measures such as ecological and socioeconomic grounds. Like many Gross Domestic Product. However, these measures business and public-policy decisions that are not do not account for the costs (and benefits) of explicitly being made with a sustainable ‘triple the natural and social capital embodied in the bottom line’ focus, the community’s economic cost- ecosystems and people that help generate the benefit conversation has focused primarily on the economic output being measured. Nor do economic benefits the facility could bring to the measures such as gDp account for degradation to region. However, Concentrated Animal Feeding natural and social capital, which if left unchecked, Operations, or caFos, frequently arrive with could impact the ability of the economic system significant ecological and social costs. This report to continue producing. In particular, the value of is aimed at bringing balance to the local policy- externalities (impacts to other stakeholders beyond making conversation by explicitly accounting for the immediate entity being measured) are often not the regional economic costs associated with caFo- accounted for in making either a project design or related ecological and social degradation. management decision or a go/no-go decision for a By establishing an “ecosystem services risk model,” new development. we estimated the risk of caFo-related impacts to However, continuing developments in ecological the ecosystem services being examined. We also and economic science are changing this situ- projected the economic consequences that could ation. We can now more accurately assess the be expected to affect the community, supporting effects of the ecological damage that unsus- businesses, and its workers. The analysis showed tainable development inflicts. Furthermore, on that the TiD caFo would have a significant impact, the economic accounting side, numerous private- resulting in a net one-time loss of $2.30M and and public-sector initiatives are underway which annual losses of $5.07M every year thereafter to the are integrating a full-cost-accounting approach community (see Table 1). that incorporates economic, ecological, and social factors into the decision-making process. This report brings this integrated perspective to the The rolling hills of Jo Daviess County (P.Fraterdeus) Tradition Investments caFo, examining the 2 potential economic costs associated with caFo- ecological degradation. The research approach related ecological and social degradation. included an extensive review of the literature, along with analysis of primary and secondary extant The regional context data, contingent valuation studies and benefits- The Tradition Investments Dairy T( iD) caFo transfer calculations, localization of non-local data, would be situated in Jo Daviess County, Illinois, regression analyses and risk estimates. In order to which is a rural county characterized by thin solidify the assumptions made in this analysis, we top soil and fractured bedrock that is particu- have prepared a list of future research items that larly picturesque, due partly to its location in can be undertaken to narrow the range of uncer- the Driftless Region, a unique geological area tainty involved in our estimates. known for its scenic views, rolling hills, thriving

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