The Value of Lake Champlain

An Environmental and Economic Analysis
PRS Briefs
PRS Policy Brief 1516-01
Sunday, February 14, 2016

As Lake Champlain, the sixth largest freshwater lake in North America, continues to suffer from excessive phosphorous pollution and expansive algae growth, the State of Vermont faces a costly mandate from the Environmental Protection Agency to curtail the pollution. The cleanup will require a budgetary expenditure of $156 million per year for ten years, and although the Lake is a popular natural attraction for Vermonters and tourists to visit, it is difficult to conceptualize Lake Champlain’s actual worth to the state and the areas that surround it in the Lake Champlain Basin. When there is such a large bill to pay, Vermonters are asking what the benefits are to improving the water quality of Lake Champlain, and if it will improve their lives in the Green Mountain State.

This report determines, primarily through quantitative analysis, an estimation of the value of Lake Champlain. By identifying sectors of the economy and environment that are affected by the Lake, such as property values and the fishing industry, and then assigning those sectors concrete dollar values, this report attaches an approximation dollar value to represent Lake Champlain’s worth to the State of Vermont. In addition, this report assigns an approximate dollar value to the potential economic losses that could result if the phosphorous pollution is not addressed. These values are put in the appropriate context throughout the report, and are connected with the Lake’s water quality, the City of Burlington, and the State of Vermont as a whole. Several interviews with Vermont residents and business managers help illustrate these connections, as well as the role that the Lake plays in Vermont society. With all of the economic values considered and placed in the appropriate societal context, this report finds that Lake Champlain is currently worth a minimum of roughly $580 million annually, which could increase to at least $763 million with a clean-up. The potential losses due to pollution in Lake Champlain, assuming a one-meter water clarity decrease, could total at least $177 million. This includes an annual loss of $18 million, as well as a $159 million decrease in seasonal property value.