Economic costs and benefits associated with investments in pollution prevention structures

Both fertilizers and pesticides are primary sources of surface and groundwater contamination in the US. The agrichemical industry came under increased pressures in the mid-1980s to implement environmentally sound management practices and to install containment structures around fertilizer and chemical storage/handling areas to prevent future contamination of existing sites or the movement of contaminants offsite. TVA`s long and successful history of technology transfer to the retail fertilizer industry, as well as the technical expertise of the Agency`s staff, made TVA ideally suited to handle the new environmental challenge. It was during this time period that TVA`s Model Site Demonstration Program (MSD) and Individual Technology Demonstration Program (ITD) were conceived. The general objective of these programs is to provide research, development, and application of pollution prevention technologies and strategies for industries which market or use fertilizers, pesticides, and other agricultural chemicals. From an economic perspective, the installation of pollution prevention structures, as well as adherence to other regulatory requirements carries a real cost to the agrichemical retailer. However, there may also be benefits tied to the adoption of new technology that would offset some or all of the additional operating costs accrued as a result of investment in the environmental technology. This paper attempts to document the economic costs associated with investments in pollution prevention technologies and adherence to environmental regulations at TVA demonstrator sites; as well as the potential benefits an agribusiness dealer may accrue as a result of the environmental investment