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What is a clean environment worth to rural Wisconsin?

In 2010, Wisconsin had 5 frac sand mines. Today, more than 120 such mines and half as many processing facilities dot the rural landscape along the Mississippi River bluffs so popular with tourists for eagle watching, biking, hiking, canoeing, and fishing. Communities in Wisconsin, Minnesota and Iowa are struggling with a mining boom powered by rapid growth of hydraulic fracturing for natural gas and oil production across the U.S. It’s the high quality silica sand lying very close to the surface that has pitted neighbor against neighbor, as mining companies scramble for permits to extract sand on farms and other private lands.

“Sand mining is not the only environmental challenge facing rural Wisconsin,” says Dan Phaneuf. “We also have water pollution caused by the declining paper industry, groundwater depletion and pollution from agriculture, and population growth.” Yet Wisconsin, with its strong traditions of conservation, has some of the highest outdoor recreation participation in the country, and it’s a national leader in converting unused railways to bike paths. Tourism based on natural beauty – or “rural amenities” – forms an important part of the economic base in many small towns that no longer rely solely on farming.

Phaneuf and his colleagues, Corbett Grainger and Nick Parker, aim to study how environmental and land use changes will affect small communities that are so dependent on maintaining an unspoiled environment. These economies are especially vulnerable to shocks like droughts or floods caused by climate change, new renewable energy policies, or changing markets for commodities like frac sand or corn for ethanol.

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The research team will target three areas for study: the environmental, economic and health impacts of sand mining; the effects of agricultural water use in Wisconsin’s central sand counties, and the transition away from pulp and paper manufacturing that once drove the economies of the Fox River Valley.

Each member brings unique skills to the project. Grainger will use his expertise in studying the distributional effects of environmental regulations to understand people’s choices about where to live and work. Will fears about air and water quality, as well as other hazards, drive people from those mining boom areas?

Parker will look at how public and private conservation efforts affect land uses and ecological outcomes. Can the communities experiencing a plunge in employment in pulp and paper rejuvenate their economies by exploiting their natural amenities?

Finally, Phaneuf’s experience in benefit-cost modeling will establish the value of changes such as decreased air quality in mining areas, or transitioning forested areas from paper production to carbon sequestration and tourism.

Construction of a data laboratory will allow researchers to look for linkages among land use changes, residential choices, environmental quality, and economic growth or decline. It will also hold newly gathered data relevant for this project and beyond. “A well-designed and expandable database will be an important output from this research, and one that we expect to be useful for other investigators, as well,” says Phaneuf.

“We hope our models will help us understand the consequences of the mining boom, using massive irrigation for agriculture, the way conservation practices can change land use in beneficial ways, and how people react to new large-scale sources of pollution, among other things,” he added. “Researchers and policy-makers in other states will be able to extrapolate our findings to help their own rural communities.”

This story was first published on the Department of Agricultural and Applied Economics’s website.