A LONG‐TERM,WATERSHED‐SCALE,EVALUATION OF THE IMPACTS OF ANIMAL WASTE BMPs ON INDICATOR BACTERIA CONCENTRATIONS1

ABSTRACT: Driven by increasing concerns about bacterial pollution from agricultural sources, states such as Virginia have initiated cost sharing programs that encourage the use of animal waste best management practices (BMPs) to control this pollution. Although a few studies have shown that waste management BMPs are effective at the field scale, their effectiveness at the watershed scale and over the long term is unknown. The focus of this research was to evaluate the effectiveness of BMPs in reducing bacterial pollution at the watershed scale and over the long term. To accomplish this goal, a 1,163 ha watershed located in the Piedmont region of Virginia was monitored over a ten‐year period. Fecal coliforms (FC) and fecal streptococci (FS) were measured as indicators of bacterial pollution. A pre‐BMP versus post‐BMP design was adopted. Major BMPs implemented were manure storage facilities, stream fencing, water troughs, and nutrient management. Seasonal Kendall trend analysis revealed a significant decreasing trend during the post‐BMP period for FC concentrations at the watershed outlet, but not at the subwatershed level. Implementation of BMPs also resulted in a significant reduction in the geometric mean of FS concentrations. FC concentrations in streamflow at the watershed outlet exceeded the Virginia primary standard 86 and 74 percent of the time during pre‐BMP and post‐BMP periods, respectively. Corresponding exceedances for the secondary standard were 50 and 41 percent. Violations decreased only slightly during the post‐BMP period. The findings of this study suggest that although BMP implementation can be expected to accomplish some improvement in water quality, BMP implementation alone may not ensure compliance with current water quality standards.     

An Open Source GIS‐Based Decision Support System for Watershed Evaluation of Best Management Practices

Economic costs, water quantity/quality benefits, and cost effectiveness of agricultural best management practices (BMPs) at a watershed scale are increasingly examined using integrated economic‐hydrologic models. However, these models are typically complex and not user‐friendly for examining the effects of various BMP scenarios. In this study, an open source geographic information system (GIS)‐based decision support system (DSS), named the watershed evaluation of BMPs (WEBs), was developed for creating BMP scenarios and simulating economic costs and water quantity/quality benefits at farm field, subbasin, and watershed scales. This DSS or WEBs interface integrated a farm economic model, the Soil and Water Assessment Tool (SWAT), and an optimization model within Whitebox Geospatial Analysis Tools (GAT), an open source GIS software. The DSS was applied to the 14.3‐km² Gully Creek watershed, a coastal watershed in southern Ontario, Canada that drains directly into Lake Huron. BMPs that were evaluated included conservation tillage, nutrient management, cover crop, and water and sediment control basins. In addition to assessing economic costs, water quantity/quality benefits, and cost effectiveness of BMPs, the DSS can be also used to examine prioritized BMP types/locations and corresponding economic and water quantity/quality tradeoffs in the study watershed based on environmental targets or budget constraints. Further developments of the DSS including interface transfer to other watersheds are also discussed. Editor's note : This paper is part of the featured series on SWAT Applications for Emerging Hydrologic and Water Quality Challenges. See the February 2017 issue for the introduction and background to the series.     

Flood Risk Reduction from Agricultural Best Management Practices

Best management practices (BMPs) play an important role in improving impaired water quality from conventional row crop agriculture. In addition to reducing nutrient and sediment loads, BMPs such as fertilizer management, reduced tillage, and cover crops could alter the hydrology of agricultural systems and reduce surface water runoff. While attention is devoted to the water quality benefits of BMPs, the potential co‐benefits of flood loss reduction are often overlooked. This study quantifies the effects of selected commonly applied BMPs on expected flood loss to agricultural and urban areas in four Iowa watersheds. The analysis combines a watershed hydrologic model, hydraulic model outputs, and a loss estimation model to determine relationships between hydrologic changes from BMP implementations and annual economic flood loss. The results indicate a modest reduction in peak discharge and economic loss, although loss reduction is substantial when urban centers or other high‐value assets are located downstream in the watershed. Among the BMPs, wetlands, and cover crops reduce losses the most. The research demonstrates that watershed‐scale implementation of agricultural BMPs could provide benefits of flood loss reduction in addition to water quality improvements.     

A WATER QUALITY‐BASED APPROACH FOR WATERSHED WIDE BMP STRATEGIES1

ABSTRACT: Watershed management strategies generally involve controlling nonpoint source pollution by implementing various best management practices (BMPs). Currently, stormwater management programs in most states use a performance‐based approach to implement onsite BMPs. This approach fails to link the onsite BMP performance directly to receiving water quality benefits, and it does not take into account the combined treatment effects of all the stormwater management practices within a watershed. To address these issues, this paper proposes a water quality‐based BMP planning approach for effective nonpoint source pollution control at a watershed scale. A coupled modeling system consisting of a watershed model (HSPF) and a receiving water quality model (CE‐QUAL‐W2) was developed to establish the linkage between BMP performance and receiving water quality targets. A Monte Carlo simulation approach was utilized to develop alternative BMP strategies at a watershed level. The developed methodology was applied to the Swift Creek Reservoir watershed in Virginia, and the results show that the proposed approach allows for the development of BMP strategies that lead to full compliance with water quality requirements.     

Agricultural BMP Effectiveness and Dominant Hydrological Flow Paths: Concepts and a Review

We present a conceptual framework that relates agricultural best management practice (BMP) effectiveness with dominant hydrological flow paths to improve nonpoint source (NPS) pollution management. We use the framework to analyze plot, field and watershed scale published studies on BMP effectiveness to develop transferable recommendations for BMP selection and placement at the watershed scale. The framework is based on the location of the restrictive layer in the soil profile and distinguishes three hydrologic land types. Hydrologic land type A has the restrictive layer at the surface and BMPs that increase infiltration are effective. In land type B1, the surface soil has an infiltration rate greater than the prevailing precipitation intensity, but there is a shallow restrictive layer causing lateral flow and saturation excess overland flow. Few structural practices are effective for these land types, but pollutant source management plans can significantly reduce pollutant loading. Hydrologic land type B2 has deep, well‐draining soils without restrictive layers that transport pollutants to groundwater via percolation. Practices that increased pollutant residence time in the mixing layer or increased plant water uptake were found as the most effective BMPs in B2 land types. Matching BMPs to the appropriate land type allows for better targeting of hydrologically sensitive areas within a watershed, and potentially more significant reductions of NPS pollutant loading.     

LAWS AND PROGRAMS FOR CONTROLLING NONPOINT SOURCE POLLUTION IN FOREST AREAS1

ABSTRACT: Recent federal legislation strengthened nonpoint source pollution regulations and helped to support and standardize pollution control efforts. A comprehensive review of current state and federal programs for forest areas reveals a substantial increase in agency water quality protection activities. These new efforts emphasize monitoring to assess the use and effectiveness of best management practices (BMPs). Recent monitoring reveals that BMP use is increasing and that such use typically maintains water quality within standards. However, information is generally lacking about the cost effectiveness of BMP programs. Carefully designed and executed monitoring is the key to better specification of BMPs and more cost effective water quality protection. (KEY TERMS: water quality; nonpoint source pollution; water law; watershed management; forestry; best management practices.)     

Application of a Multi-Objective Optimization Method to Provide Least Cost Alternatives for NPS Pollution Control

Nonpoint source (NPS) pollutants such as phosphorus, nitrogen, sediment, and pesticides are the foremost sources of water contamination in many of the water bodies in the Midwestern agricultural watersheds. This problem is expected to increase in the future with the increasing demand to provide corn as grain or stover for biofuel production. Best management practices (BMPs) have been proven to effectively reduce the NPS pollutant loads from agricultural areas. However, in a watershed with multiple farms and multiple BMPs feasible for implementation, it becomes a daunting task to choose a right combination of BMPs that provide maximum pollution reduction for least implementation costs. Multi-objective algorithms capable of searching from a large number of solutions are required to meet the given watershed management objectives. Genetic algorithms have been the most popular optimization algorithms for the BMP selection and placement. However, previous BMP optimization models did not study pesticide which is very commonly used in corn areas. Also, with corn stover being projected as a viable alternative for biofuel production there might be unintended consequences of the reduced residue in the corn fields on water quality. Therefore, there is a need to study the impact of different levels of residue management in combination with other BMPs at a watershed scale. In this research the following BMPs were selected for placement in the watershed: (a) residue management, (b) filter strips, (c) parallel terraces, (d) contour farming, and (e) tillage. We present a novel method of combing different NPS pollutants into a single objective function, which, along with the net costs, were used as the two objective functions during optimization. In this study we used BMP tool, a database that contains the pollution reduction and cost information of different BMPs under consideration which provides pollutant loads during optimization. The BMP optimization was performed using a NSGA-II based search method. The model was tested for the selection and placement of BMPs in Wildcat Creek Watershed, a corn dominated watershed located in northcentral Indiana, to reduce nitrogen, phosphorus, sediment, and pesticide losses from the watershed. The Pareto optimal fronts (plotted as spider plots) generated between the optimized objective functions can be used to make management decisions to achieve desired water quality goals with minimum BMP implementation and maintenance cost for the watershed. Also these solutions were geographically mapped to show the locations where various BMPs should be implemented. The solutions with larger pollution reduction consisted of buffer filter strips that lead to larger pollution reduction with greater costs compared to other alternatives.     

EFFECTS OF WATERSHED BEST MANAGEMENT PRACTICES ON HABITAT AND FISH IN WISCONSIN STREAMS1

ABSTRACT: We evaluated the effectiveness of watershed‐scale implementations of best‐management practices (BMPs) for improving habitat and fish attributes in two coldwater stream systems in Wisconsin. We sampled physical habitat, water temperature, and fish communities in multiple paired treatment and reference streams before and after upland (barnyard runoff controls, manure storage, contour plowing, reduced tillage) and riparian (stream bank fencing, sloping, limited rip‐rapping) BMP installation in the treatment subwatersheds. In Spring Creek, BMPs significantly improved overall stream habitat quality, bank stability, instream cover for fish, abundance of cool‐ and coldwater fishes, and abundance of all fishes. Improvements were most pronounced at sites with riparian BMPs. Water temperatures were consistently cold enough to support coldwater fishes such as trout (Salmonidae) and sculpins (Cottidae) even before BMP installation. We observed the first‐time occurrence of naturally reproduced brown trout (Salmo trutta) in Spring Creek, indicating that the stream condition had been improved to be able to partially sustain a trout population. In Eagle Creek and its tributary Joos Creek, limited riparian BMPs led to localized gains in overall habitat quality, bank stability, and water depth. However, because few upland BMPs were installed in the subwatershed there were no improvements in water temperature or the quality of the fish community. Temperatures remained marginal for coldwater fish throughout the study. Our results demonstrate that riparian BMPs can improve habitat conditions in Wisconsin streams, but cannot restore coldwater fish communities if there is insufficient upland BMP implementation. Our approach of studying multiple paired treatment and reference streams before and after BMP implementation proved effective in detecting the response of stream ecosystems to watershed management activities.     

Model for Prioritizing Best Management Practice Implementation: Sediment Load Reduction

Understanding the best way to allocate limited resources is a constant challenge for water quality improvement efforts. The synoptic approach is a tool for geographic prioritization of these efforts. It uses a benefit-cost framework to calculate indices for functional criteria in subunits (watersheds, counties) of a region and then rank the subunits. The synoptic approach was specifically designed to incorporate best professional judgment in cases where information and resources are limited. To date, the synoptic approach has been applied primarily to local or regional wetland restoration prioritization projects. The goal of this work was to develop a synoptic model for prioritizing watersheds within which suites of agricultural best management practices (BMPs) can be implemented to reduce sediment load at the watershed outlets. The model ranks candidate watersheds within an ecoregion or river basin so that BMP implementation within the highest ranked watersheds will result in the most sediment load reduction per conservation dollar invested. The model can be applied anywhere and at many scales provided that the selected suite of BMPs is appropriate for the evaluation area’s biophysical and climatic conditions. The model was specifically developed as a tool for prioritizing BMP implementation efforts in ecoregions containing watersheds associated with the USDA-NRCS conservation effects assessment project (CEAP). This paper presents the testing of the model in the little river experimental watershed (LREW) which is located near Tifton, Georgia, USA and is the CEAP watershed representing the southeastern coastal plain. The application of the model to the LREW demonstrated that the model represents the physical drivers of erosion and sediment loading well. The application also showed that the model is quite responsive to social and economic drivers and is, therefore, best applied at a scale large enough to ensure differences in social and economic drivers across the candidate watersheds. The prioritization model will be used for planning purposes. Its results are visualized as maps which enable resource managers to identify watersheds within which BMP implementation would result in the most water quality improvement per conservation dollar invested.     

Comparing Costs of Onsite Best Management Practices to Nutrient Credits for Stormwater Management: A Case Study in Virginia

Best management practices (BMPs) are widely used to mitigate impacts of increased impervious surfaces on stormwater runoff. However, there is limited detailed and up‐to‐date information available on the cost of designing, constructing, and maintaining BMPs over their lifetime. The objective of this study is to analyze BMPs recently constructed by the Virginia Department of Transportation (VDOT) to quantify their total cost per pound of phosphorus removed annually. A motivating factor for the study is recent changes to regulatory guidelines in Virginia which allow for full or partial substitution of purchased nutrient credits in lieu of constructing onsite BMPs to achieve compliance with stormwater quality regulations. Results of the analysis of nine BMPs found their cost ranged from $20,100 to $74,900, in 2014 dollars, per pound ($44,313‐$165,126 per kg) of phosphorus removed. Based on these results and assuming current credit prices procured by VDOT, purchasing nutrient credits is a cost‐effective option for the agency, especially when factoring in the cost of additional right of way for the BMP. Based on this finding, we expect compliance with stormwater quality regulations through credit purchases to become more widely used in Virginia. Moving forward, we suggest more direct tracking of BMP costs to support comparisons between BMP costs across a range of types and conditions to credit purchases for meeting stormwater regulations.     

MODELING COST-EFFECTIVENESS OF AGRICULTURAL NONPOINT POLLUTION ABATEMENT PROGRAMS ON TWO FLORIDA BASINS1

ABSTRACT: A model was developed to evaluate the cost-effectiveness of alternative “best management practice” (BMP) implementation schemes on two agricultural basins in Florida. The model selectively applies BMPs throughout the basin on a field by field basis, estimates the associated costs, and predicts the relative water quality improvement (reductions in nitrogen and phosphorus). The water quality model links field scale simulation (for detailed BMP evaluation) with basin delivery and attenuation functions to predict the basin-wide effects of any combination of BMPs. Fifteen BMP scenarios were evaluated to aid in prioritizing BMPs for implementation in these basins. Applying the maximum level of BMPs is estimated to cost around $1.2 million (annually), while the four most cost-effective BMPs would cost only one quarter as much, yet are projected to provide approximately 90 percent of the water quality improvement.     

EFFECTWENESS OF INTEGRATED STORMWATER MANAGEMENT IN A PORTLAND,OREGON, WATERSHED1

ABSTRACT: The City of Portland's stormwater management program, winner of EPA's Environmental Excellence Award for 1996, is committed to partnership-based, cost-effective, “green” approaches to healthy neighborhoods and water quality. The stormwater program encourages innovative, non-structural pollution reduction techniques like native landscaping, stormwater pollution reduction bioswales and ponds, and public involvement and education. Effectiveness of stormwater best management practices (BMPs) has been difficult to determine on a citywide basis. Recognizing this problem, the City of Portland launched the Parkrose Pilot Project in 1994 to test the effectiveness of a wide range of BMPs in a small watershed in north Portland, the Parkrose catchment, and monitor the results prior to citywide implementation. This catchment was selected because of its small size (144 acres), its representative mix of land uses, and an extensive record of water quality monitoring data. This paper examines the City's strategy in selecting the Parkrose study area as a pilot watershed, the BMPs chosen for use in the watershed, and the results of the program to date. Final success of the Parkrose project will be gauged by the attainment of measurable pollution reduction within the catchment while providing opportunities for meaningful participation by the local community in achieving water quality. Involvement by private citizens in the community is crucial to the success of the project and to ensure compliance with the federal mandate to reduce pollutants to the maximum extent practicable.     

UNCERTAINTY ANALYSIS OF BMP EFFECTWENESS FOR CONTROLLING NITROGEN FROM URBAN NONPOINT SOURCES1

ABSTRACT: The effectiveness of urban Best Management Practices (BMPs) in achieving the No-Net-Increase Policy (NNTP), a policy designed to limit nonpoint nitrogen loading to Long Island Sound (US), is analyzed. A unit loading model is used to simulate annual nitrogen exported from the Norwalk River watershed (Connecticut) under current and future conditions. A probabilistic uncertainty analysis is used to incorporate uncertainty in nitrogen export coefficients and BMP nitrogen removal effectiveness. The inclusion of uncertainty in BMP effectiveness and nitrogen export coefficients implies that additional BMPs, or BMPs with a greater effectiveness in nitrogen removal, will be required to achieve the NNIP. Even though including uncertainty leads to an increase in BMP implementation rates or BMP effectiveness, this type of analysis provides the decision maker with a more realistic assessment of the likelihood that implementing BMPs as a management strategy will be successful. Monte Carlo simulation results indicate that applying BMPs to new urban developments alone will not be sufficient to achieve the NNIP since BMPs are not 100 percent effective in removing the increase in nitrogen caused by urbanization. BMPs must also be applied to selected existing urban areas. BMPs with a nitrogen removal effectiveness of 40–60 percent, probably the highest level of removal that can be expected over an entire watershed, must be applied to at least 75 percent of the existing urban area to achieve the NNIP This high rate of application is not likely to be achieved in urbanized watersheds in the LIS watershed; therefore, additional point source control will be necessary to achieve the NNIP     

A Benefit‐Cost Analysis of Total Maximum Daily Load Implementation1

Abstract: Total Maximum Daily Load (TMDL) implementation generates benefits and costs from water quality improvements, which are rarely quantified. This analysis examines a TMDL written to address bacteria and aquatic‐life‐use impairments on Abrams and Opequon Creeks in Virginia. Benefits were estimated using a contingent valuation survey of local residents. Costs were based on the number and type of best management practices (BMPs) necessary to achieve TMDL pollution reduction goals. BMPs were quantified using watershed‐scale water quality simulation models (Generalized Watershed Loading Function and Hydrological Simulation Program‐FORTRAN). Based on our projections, the costs to achieve TMDL induced pollution reduction goals outweigh the estimated benefits. Benefit‐cost ratios ranged between 0.1 and 0.3.     

Assessing BMP Effectiveness and Guiding BMP Planning Using Process‐Based Modeling

There is an increasing need for improved process‐based planning tools to assist watershed managers in the selection and placement of effective best management practices (BMPs). In this article, we present an approach, based on the Water Erosion Prediction Project model and a pesticide transport model, to identify dominant hydrologic flow paths and critical source areas for a variety of pollutant types. We use this approach to compare the relative impacts of BMPs on hydrology, erosion, sediment, and pollutant delivery within different landscapes. Specifically, we focus on using this approach to understand what factors promoted and/or hindered BMP effectiveness at three Conservation Effects Assessment Project watersheds: Paradise Creek Watershed in Idaho, Walnut Creek Watershed in Iowa, and Goodwater Creek Experimental Watershed in Missouri. These watersheds were first broken down into unique land types based on soil and topographic characteristics. We used the model to assess BMP effectiveness in each of these land types. This simple process‐based modeling approach provided valuable insights that are not generally available to planners when selecting and locating BMPs and helped explain fundamental reasons why long‐term improvement in water quality of these three watersheds has yet to be completely realized.     

WATERSHED LEVEL BEST MANAGEMENT PRACTICE SELECTION AND PLACEMENT IN THE TOWN BROOK WATERSHED, NEW YORK1

Abstract: For a number of years, best management practices (BMPs) have been implemented within the Town Brook watershed as part of a watershed wide effort to reduce phosphorus losses to the New York City water supply reservoirs. Currently, there are no quantitative indications of the effectiveness of these practices at the watershed scale. Additionally, work is needed to evaluate management practice solutions for costs in relation to effectiveness. In this study we develop a methodology for evaluating management solutions to determine the best way(s) to select and place management practices so that pollutant removal targets are met at minimum cost. The study combines phosphorus losses as simulated by the Soil and Water Assessment Tool (SWAT), management practice effectiveness estimates from a predeveloped characterization tool, and practice costs in optimizations using a genetic algorithm. For a user defined target phosphorus removal (60 percent for this study), optimization favors nutrient management plans, crop rotations, contour strip cropping, and riparian forest buffers; the most cost effective scenario achieves a cost effectiveness of 24/kg phosphorus removal per year compared to the 34/kg phosphorus removal per year associated with the current basic implementation scheme. The study suggests that there is a need to evaluate potential solutions prior to implementation and offers a means of generating and evaluating the solutions.     

Locating Existing Best Management Practices Within a Watershed: The Value of Multiple Methods

There is an increasing need to document the impacts of conservation‐related best management practices (BMPs) on water quality within a watershed. However, this impact analysis depends upon accurate geospatial locations of existing practices, which are difficult to obtain. This study demonstrates and evaluates three different methods for obtaining geospatial information for BMPs. This study was focused on the Eagle Creek Watershed, a mixed use watershed in central Indiana. We obtained geospatial information for BMPs through government records, producer interviews, and remote‐sensing aerial photo interpretation. Aerial photos were also used to validate the government records and producer interviews. This study shows the variation in results obtained from the three sources of information as well as the benefits and drawbacks of each method. Using only one method for obtaining BMP information can be incomplete, and this study demonstrates how multiple methods can be used for the most accurate picture.     

EFFECTS OF BEST MANAGEMENT PRACTICES ON FOREST STREAMWATER QUALITY IN EASTERN KENTUCKY1

ABSTRACT: Forest land managers are concerned about the effects of logging on soil erosion, streamflow, and water quality and are promoting the use of Best Management Practices (BMPs) to control impacts. To compare the effects of BMP implementation on streamwater quality, two of three small watersheds in Kentucky were harvested in 1983 and 1984, one with BMPs, the other without BMPs. There was no effect of clearcutting on stream temperatures. Streamflow increased by 17.8 cm (123 percent) on the BMP watershed during the first 17 months after cutting and by 20.6 cm (138 percent) on the Non-BMP watershed. Water yields remained significantly elevated compared to the uncut watershed 8 years after harvesting. Suspended sediment flux was 14 and 30 times higher on the BMP and Non-BMP Watersheds, respectively, than on the uncut watershed during treatment, and 4 and 6.5 times higher in the 17 months after treatment was complete. Clearcutting resulted in increased concentrations of nitrate, and other nutrients compared to the uncut watershed, and concentrations were highest on the non-BMP watershed. Recovery of biotic control over nutrient losses occurred within three years of clearcutting. The streamside buffer strip was effective in reducing the impact of clearcutting on water yield and sediment flux.     

OPTIMIZATION PROCEDURE FOR COST EFFECTIVE BMP PLACEMENT AT A WATERSHED SCALE1

ABSTRACT: A combinatorial optimization procedure for best management practice (BMP) placement at the watershed level facilitates selection of cost effective BMP scenarios to control non point source (NFS) pollution. A genetic algorithm (GA) was selected from among several optimization heuristics. The GA combines an optimization component written in the C++ language with spatially variable NFS pollution prediction and economic analysis components written within the Arc View geographic information system. The procedure is modular in design, allowing for component modifications while maintaining the basic conceptual framework. An objective function was developed to lexicographically optimize pollution reduction followed by cost increase. Scenario cost effectiveness is then calculated for scenario comparisons. The NPS pollutant fitness score allows for evaluation of multiple pollutants, based on prioritization of each pollutant. The economic component considers farm level public and private costs, cost distribution, and land area requirements. Development of a sediment transport function, used with the Universal Soil Loss Equation, allows the optimization procedure to run within a reasonable timeframe. The procedure identifies multiple near optimal solutions, providing an indication of which fields have a more critical impact on overall cost effectiveness and flexibility in the final solution selected for implementation. The procedure was demonstrated for a 1,014‐ha watershed in the Ridge and Valley physiographic region of Virginia.     

Maximizing Returns from Payments for Water‐Based Ecosystem Services: Incorporating Externality Effects of Land Management

Given the expansion of payments for water‐based ecosystem services (PWES) worldwide, two relevant issues are as follows: (1) determination of efficient allocations of payments among land managers, and (2) how this might change when paying one manager to implement a best management practice (BMP) to enhance an ecosystem service impacts the cost‐effectiveness of BMPs considered by other land managers not currently involved in PWES. Such externalities may be negative if diminishing returns dominate, or positive if mechanisms such as “social diffusion” dominate. We analyze how a planner should optimally allocate payments, depending on whether the expected externalities are negligible, negative, or positive. We employ (1) an optimal control model to gain insights on the problem’s dynamics, and (2) stochastic dynamic programming to determine optimal funding strategies using a specific application. The study contributes to the literature by identifying dynamically optimal PWES payment patterns, and illustrates how they should change when one accounts for externalities induced by the program. Because such impacts have not been addressed previously in a rigorous way, this treatment provides useful value added for PWES design and implementation.