University of California, Riverside

Environmental Sciences

Research Project

Financial Incentives for Control of Storm Water Runoff

Professors Bo Cutter, Ken Baerenklau and master ’s student Autumn DeWoody are creating a plan to improve water quality in the Los Angeles area using the economists’ proclivity for solving problems using prices and markets. The rivers, streams and estuaries of much of Southern California are contaminated with a wide variety of pollutants, such as various toxic metals, trash, and bacteria that are washed off of our sidewalks, roads, and other impervious surfaces by rainstorms and overuse of sprinklers. The pollution damages fish and other wildlife and causes significant illness among beach goers.

Because of the widespread (non-point) nature of the pollution it is difficult to apply the standard regulatory solution of identifying a few key sources of pollution and requiring them to clean their effluent. In the case of storm water runoff almost every piece of property generates some pollution. The traditional solution to storm water runoff has been to put it in a pipe and remove it to a water body as quickly as possible. This solves flooding problems but pollutes the receiving waterbody. More recently, storm water agencies have built large ponds or depression basins, or other structures to receive and filter runoff or infiltrate runoff into the ground. These are effective but demand large amounts of land that are difficult and expensive to obtain in dense urban areas.

Instead of these traditional tools, Bo Cutter, Ken Baerenklau, and Autumn DeWoody are designing a system of financial incentives that would pay property owners to detain and infiltrate runoff on their own properties by installing runoff management devices (Examples are given below). By detaining and filtering the runoff not only is pollution reduced but also valuable groundwater aquifers are refilled with infiltration from storm water runoff.

Economists have been successful at using this type of decentralized, market-based, measures to solve pollution problems in a variety of pollution problems from the Sulfur Dioxide tradeable permit market to controlling nitrogen pollution in Long Island Sound. These market-based measures work because they persuade polluters with low costs of pollution reduction to reduce pollution.

The system of financial incentives for storm water control works similarly. By setting a price (payment) the system persuades landowners with costs below that price to install storm water management devices and detain runoff. These infiltration devices take up little area and are relatively cheap to install. The environmental economics research entails estimating the property owner’s cost of installation and devising an appropriate payment scheme that will persuade property owner’s to install and maintain the devices at a low cost.

This research is generously supported by EPA Grant NO: CP-96950701-0 and the City of Los Angeles.

With luck, you will see properties across Southern California sprouting devices like this one soon.

storm water management device

The study area for the financial incentive design is the Sun Valley watershed near Burbank in Los Angeles county:

map of study area

larger size of the right side...

This BMP captures runoff draining from the rooftop and infiltrates it in a gravel planter before it reaches the street.


More Information

General Campus Information

University of California, Riverside
900 University Ave.
Riverside, CA 92521
Tel: (951) 827-1012

Department Information

Environmental Sciences
Geology 2460

Tel: (951) 827-5116
Fax: (951) 827-4652