Valuing the Economic Benefits of Maine’s Great Ponds in the 21st Century

Location: University of Maine
Sponsor: Maine Water Resources Research Institute 2022 (104b)

Research Team

  • Team Leader: Adam Daigneault, Associate Professor, Forest Resources, and Mitchell Center Faculty Fellow, UMaine
  • Keith Evans, Economics, UMaine

Project Partners

The value and use of the 2,700 Maine’s Great Lakes and Ponds have changed significantly over the past 25 years, when it was estimated that these waterbodies contributed $5 billion/year in direct and indirect sales and a net economic value of over $11 billion/year in today’s dollars. Drivers such as residential and commercial development, invasive species spread, and climate change put lakes across the state at risk of water quality and habitat degradation. Decision makers across the state are looking for current, peer-reviewed information to identify cost-effective ways to manage the myriad uses of these waterbodies while protecting water quality, wildlife habitat, and property values. In response, this project will estimate the contribution of Maine’s Great Ponds to the state’s economy, identify opportunities to enhance the benefits to the state’s lakes, and implement a statewide outreach program to share this info with decision-makers and local stakeholders to improve their ability to protect the diverse benefits that the state’s lakes and ponds provide.

This project connects with a large network of over 150 lake associations and watershed organizations across the state in addition to over 1,200 lake stewards. Armed with information about the value of their lakes to local municipal budgets, people will be able to bring the lake protection economic argument to their towns, municipal officials, select boards, etc., and make the case for additional shoreline protection projects and investments in shoreland protection. Further, every legislative session in Augusta brings proposals to weaken Shoreland Zoning rules. Sharing the findings of this study in the halls of the capitol can help bolster the argument for maintaining regulations and strengthening rules that protect water quality.

The three main objectives of the project are: 1) Estimate how the economic impact of Maine’s Great Ponds has evolved since 1995, 2) Identify what can be done to enhance the economic contribution of Maine’s Great Ponds to the state economy, and 3) Develop a broad stakeholder outreach program to turn research into action, ultimately improving environmental quality and growing the future net economic benefits of Maine’s Great Ponds. Our results will be useful for engaging a diverse population in meaningful dialogue about how resources should be allocated to protect and improve the water quality associated with the broad benefits provided by the state’s lakes and ponds. Findings will be disseminated to and discussed with interested parties using a targeted outreach program.

Project Update

The economic value and use of Maine’s 2,700 Great Lakes and Ponds have undergone notable changes over the past 25 years. Recent threats to these water bodies, including development, invasive species, and climate change have amplified the need for updated economic data to inform conservation decisions. This project utilized a range of methods, including surveys, non-market valuation, and expenditure analysis to assess the economic value and impacts of Maine’s lakes. Key findings include:

  • The total estimated value of using Maine’s lakes amount to nearly $17 billion/yr, a 38% increase over the inflation-adjusted estimates from the previous study by Boyle et al (1997).
  • Lakefront properties are valued at over $13 billion/yr. Further, a 1m increase in water clarity could increase the values of Maine homes by 0.3 to 0.9%.
  • Recreational uses were valued at $3.4 billion/yr. A moderate decline in water quality was estimated to reduce this value by 6% due to a reported change in use.
  • Summer camps on lakes were valued at $105/yr, a 26% decline from the previous
  • Water consumption expenditures area about $100 million/yr.

About 76% of the survey respondents perceived the overall state of water quality in Maine’s lakes as positive. However, barriers like travel costs and accessibility impede further utilization. The study’s outcomes emphasize the interconnectedness of ecological, social, and economic sustainability factors and underscore the immense economic value of Maine’s lakes.

Products

Presentations

  • Genoter, M. 2024. Communicating the Value of Maine Lakes. Poster presented at Maine Sustainability and Water Conference. Augusta, ME. March 28, 2024
  • Zhao, J. 2024. Valuing the Economic Benefits of Maine’s Lakes and Great Ponds in the 21st Century. Presentation given at Maine Sustainability and Water Conference. Augusta, ME. March 28, 2024
  • Genoter, M and Daigneault, A.. 2024. Valuing the Economic Benefits of Maine’s Great Ponds in the 21st Century. Presentation given at Maine Lakes Conference. Farmington, ME. June 21, 2024.
  • Zhao et al. 2024. Water Quality Effects on Property and Recreational Values, 2023. Presentation given at Maine Lake Summit. Augusta, ME. April 25, 2024.

Education/Outreach Activities:

Other Activities (media interviews, technology transfer activity, etc):

Report and press release picked up several media outlets. See https://umaine.edu/news/blog/2024/06/07/media-highlight-economic-impact-study-from-umaine-on-state-lakes/:

  • MaineBiz
  • Fox 22
  • WMTB
  • Portland Press Herald
  • Bangor Daily News