Nature’s Kidneys: The Role of Wetland Reserve Easements in Restoring Water Quality

Nicole Karwowski and Marin Skidmore

Journal of the Association of Environmental and Resource Economists, 2026, vol. 13, issue 2, 495 - 531

Abstract: Billions of dollars have been dedicated to mitigating nonpoint source pollution from US agriculture. Wetlands provide an ex post natural solution by filtering sediments and excess nutrients from the landscape. Quantifying the impact of wetland easements in the Wetland Reserve Program (WRP) and Agricultural Conservation Easement Program (ACEP) on water quality is critical for optimal fund allocation for nonpoint source pollution abatement. We causally identify whether newly restored wetlands reduce nitrogen and phosphorus loads at the subwatershed level in the Mississippi River Basin. Results show that wetland easements reduce ammonia and total Kjeldahl nitrogen concentrations in the local subwatershed as well as downstream. A short-term increase in local phosphorus immediately following restoration likely reflects soil disturbance. While wetlands have no significant long-term impact on local phosphorus levels, downstream reductions are observed. We estimate that this federal investment in natural infrastructure leads to lower treatment costs for local water systems.

Date: 2026
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