Chapter 37: Economic cost of cyanobacterial 

blooms 

Dennis A Steffensen 

Cooperative Research Centre for Water Quality & Treatment and Australian Water Quality Centre, Private Mail Bag Salisbury Australia 5108. 

Abstract 

Cyanobacterial blooms impact upon the water quality, environmental and 

ecological status of water bodies and affect most of the uses we make of 

water. The extent of the impact depends upon the type, size and frequency 

of the blooms, the size of the water body affected, the uses made of the 

water and the treatment options available to respond to the blooms. The 

impacts therefore vary considerably from place to place. Overall costs 

should also account for the planning and remedial actions taken to prevent 

future blooms. 

Problem 

Safe and aesthetically acceptable water is a critical need in a modern society. Good water quality is also a key prerequisite for sustainable environments. Cyanobacterial blooms impact the environmental health of water 

resources and effect how the water can be used. In particular cyanobacteria may damage human and animal health and impair the recreational value 

of the water bodies. 
856 D.A. Steffensen 

Benefits of Bloom reduction 

The benefits of reducing cyanobacterial blooms are the reduction in damages and adverse effects. The benefits can be valued by the costs that may 

be avoided or by using willingness to pay estimates. 

Improved Human Health 

It is the fundamental requirement of a water utility to ensuring that the water provided for drinking is safe. Cyanotoxins clearly have the potential to 

impact on the health of consumers and are therefore not acceptable in 

drinking water supplies or in water used to irrigate crops and water stock. 

Cyanobacteria can also produced unacceptable taste and odors. As prevention of health impacts is so fundamental to water supplies it is difficult to 

put a figure value of the benefits of preventing cyanobacterial blooms. 

The best estimate is therefore the cost of controlling blooms as detailed in 

section III. 

Improved Recreational Opportunities 

Water–based recreation is an increasingly important consideration and in 

many areas forms the basis of the tourist industry. Cyanobacterial blooms 

can render a water body unsuitable for swimming, fishing, water skiing. 

This will impact on the busineses that cater for those activities with knock 

on effects for other businesses. The blooms can therefore impact negatively on the attraction of the general area as a tourist destination. Isolated 

blooms may result in short–term losses. Recurring blooms impact on the 

reputation of the area resulting in long–term decline in tourism. 

Walker and Greer (1992) conducted detailed studies of the impact of 

cyanobacterial blooms on recreational activities in New South Wales in 

1991/92. The methodology considered the following costs: 

• those associated with recreation and tourism such as accommodation, 

transport and tourism; 

• those associated with commercial recreation facilities such as caravan 

and tourist parks; 

• those associated with the amenity value including aesthetics; and 

• long–term costs related to permanent loss of trade. 
Chapter 37: Economic Cost of Cyanobacterial Blooms 857

Case study 1 Darling River 1991 

In 1991 a bloom of neuro–toxic Anabaena covered 1000 km of the Darling 

River in central Australia. The affected region is a sparsely populated agricultural area in central Australia, however, the area is popular with tourists who enjoy pursuits such as fishing, swimming, camping, sight–seeing 

and hunting. All of these activities are impacted by cyanobacterial 

blooms. From surveys of two representative towns it was estimated that 

losses to the tourist industry were around $1.5 million. 

Case study 2 Nepean/Hawkesbury River 

The Hawkesbury Nepean River is located near Sydney in the state of New 

South Wales. The area supports a number of aquatic recreational facilities 

with activities including swimming, fishing, water skiing, canoeing, camping and picnicking. The proximity of the area to Australia’s largest city 

ensures that the region receives high numbers of visitors. A series of 

blooms of cyanobacteria occurred over the 1991/1992 summer between 

Windsor and Wiseman Ferry. The assessment of their impact included estimates of the costs to consumers of traveling to other sites. From a survey 

of tourist facilities it was estimated that the revenue was $6.7 million lower 

than the previous year when no blooms had been present. It is noteworthy 

that the blooms were not classified as toxic and the reduction in revenue 

was the result of negative publicity about the blooms. 

Case study 3 Various storages in New South Wales 

In 1991, nine water storages in New South Wales that are used for recreation were seriously affected by algal blooms. The economic loss was estimated at $1.2 million. 

A number of other cyanobacterial blooms had significant impacts on 

tourism but those costs have not been established. Examples include: 

• Lower River Murray – Periodic Anabaena blooms ; 

• Lake Alexandrina– Nodularia blooms, 1989 – 1992 

• East Gippsland Lakes – Nodularia bloom in 1987/88; 

• Peel Harvey Inlet – Periodic Nodularia blooms; 

• Lance Creek – Anabaena bloom 1990; 

• Candowire Reservoir Philip Island – Anabaena bloom 1991; 

• Paskeville Reservior Yorke Peninsula – Phormidium bloom 2000. 
8

All of the above incidences occurred during peak tourism periods and 

caused considerable disruption. The publicity has political as well as economic consequences. 

Improved agriculture and fishing 

There is a considerable body of evidence for the death of livestock as a result of drinking cyanobacterial contaminated water. There have been thirteen documented cases of stock deaths related to cyanobacterial blooms in 

Australia (Steffensen et al 1999). During the Anabaena bloom in the Darling River, 1600 livestock deaths were reported (Dept Water resources 

1992). Using contaminated water for crop irrigation is also a concern as 

the impact of toxins on the crops and also on livestock who consume the 

crops is uncertain. 

Toxins can accumulate in fish and shellfish with potential health risks to 

consumers. Humpage et al (1993) discussed the possible accumulation of 

saxitoxins from Anabaena in freshwater mussels. Falconer et al (1992) reported toxicity in mussels in the Peel Harvey Inlet at the time of a Nodularia bloom. However, there is a paucity of information on this issue and 

assessment of the economic impact is not possible. 

Improved Environment 

Cyanobacterial blooms are an indicator of environmental degradation and 

are often associated with reduced bio–diversity and greater instability. 

While it is difficult to place a value on the maintenance of a natural ecosystems there may be impacts fisheries, agriculture and tourism. 

Control Costs 

Immediate costs of cyanobacterial blooms 

Monitoring and testing 

Critical factors to be considered when assessing the risks related to a 

cyanobacterial bloom include the type and amount of toxin present and the 

likely progression of the bloom. Investigation of these factors requires in58 D.A. Steffensen 
 859

tensive monitoring and testing. The costs involved in assessing the nature 

and extent of the bloom will depend on its size and the facilities available 

for testing the toxins. Toxicity tests may cost over $1,000 per sample. 

Furthermore, cyanobacterial blooms can be highly patchy and unpredictable. Intensive monitoring may be required to predict the course of a 

bloom.

Blooms in small isolated storages may be relatively easily monitored 

and cost a few thousand dollars per annum. Blooms in large water bodies 

that connect with other water bodies may cost hundreds of thousands to 

adequately assess. An example of the latter is Lake Alexandrina in South 

Australia which is subject to toxic Nodularia blooms, some lasting several 

months. The Lake has an area of 75,000 hectares (180,000 acres) and has 

a number of water extraction points for domestic and agricultural use. It is 

also heavily used for recreation including swimming, boating and fishing. 

In 1989, Lake Alexandrina experienced the first major toxic cyanobacterial 

bloom in South Australia. The size of the lake, the number of extraction 

points, the variety of water uses and inexperience in dealing with blooms 

of this size caused difficulties in assessing and controlling the bloom. Assessing the risks posed by the blooms involved intensive sampling over a 

wide area using boats and shore based personnel. Aerial photography was 

also used to map the extent of the bloom and proved to be a very valuable 

tool.

Another example of a large toxic bloom occurred in the Darling River in 

Australia in 1991. This bloom of toxic Anabaena covered a 1000 km 

length of the river and affected water off–takes for a number of towns and 

numerous agricultural extraction points. The remoteness of the river increased the monitoring costs. It has been estimated that the cost of monitoring for cyanobacteria and for contingency planning to deal with blooms 

in Australia is $8.7 million per year (Atech, 2000). 

Risk Assessment 

Health risks from cyanotoxins are the major concern for water utilities and 

health authorities. Water quality guidelines have been proposed for some 

toxins and others are under consideration. These provide a basis for assessing immediate risks to health but are of little value in assessing the risk 

of an incident occurring. Also, the focus on toxins ignores other significant issues such as taste and odours, filter clogging and oxygen depletion 

which are also caused by cyanobacterial blooms. Furthermore these problems are often associated with other groups of phytoplankton. One can 

look at a hierarchy of risk assessment as follows.

Chapter 37: Economic Cost of Cyanobacterial Blooms
8

• What is the risk of excessive phytoplankton growth? 

• What is the risk that they will be cyanobacteria? 

• What is the risk that they will be toxic?

This hierarchy moves from general environmental considerations to 

more specific factors that influence the occurrence of toxic species and the 

degree of toxicity. This broad risk assessment approach fits into the Water 

Quality Management Framework that has been adopted in the 2004 Australian Drinking Water Guidelines. A similar approach has been adopted 

by the World Health Organization. The main elements of the framework 

are: 

• assessment of the likely severity and frequency of the impacts from all 

possible risks; 

• selection of critical control points; 

• development of management plans to mitigate those risks and 

• a monitoring program to assess the success of those mitigation 

strategies. 

This provides multiple barriers for the protection of the water supply. 

Cost benefit analysis can be used to prioritise the management options. 

Control Measures 

The actions taken to manage a toxic bloom can involve measures taken 

within the water body, after extraction of the water or the provision of alternative supplies.

In–water measures 

The in–water measures may include artificial mixing to disperse the 

bloom, the use of booms to protect water off–takes, application of algicides, and release of water up stream to flush out blooms. The cost of 

these measures is very site specific and difficult to generalize. 

Algicides are commonly used in some areas but banned in other areas. 

The most readily used algicides are copper based. In South Australia 

treatment of a bloom in a water supply reservoir with algicides may cost 

$20,000 to $50,000 for reservoirs ranging from 1,300 to 26,000 ML. SA 

Water spends in excess of $1 million a year using algicides to treat blooms 

and dispose of the copper contaminated water treatment sludge. As copper 

60 D.A. Steffensen 
 861

has impacts on a wide range of aquatic organisms it is not recommended 

for use in natural water bodies.

Stratification of water bodies creates favourable conditions for the 

growth of cyanobacteria. Artificial mixing is a common measure used to 

disrupt stratification and can be useful in dispersing cyanobacterial 

blooms. The most common approach is bubbling compressed air into the 

bottom of the water bodies but mechanical mixers can also be used. In 

small water bodies it may be possible to install temporary systems as an 

immediate response. For larger water bodies or for permanent systems the 

lead time precludes artificial mixing as a reactionary procedure for rapid 

response. It is also necessary to understand the factors that influence the 

stratification of the particular water body which requires research into the 

local conditions. The costs for destratification vary according the situation 

but large systems can cost several hundred thousand dollars in capital with 

running and maintenance costs about 10% of the capital costs.

In regulated rivers there may be scope for releasing water from up–

stream storages to flush out blooms. Sydney Water has released water 

from Lake Burragorang to flush blooms from the Nepean/Hawkesbury 

River. Releases of up to 70,000ML of water have been made but this is 

regarded as an extreme action. Releases have also been made from the 

Menindee Lakes to the Murrumbidgee and Darling Rivers. In 1999, 

480ML of water was released from Kangaroo Creek Dam to flush a Microcystis bloom out of Lake Torrens in Adelaide. This approach has not 

been used in subsequent blooms in Lake Torrens as it was not regarded as 

an appropriate use of water. In recent years frequent droughts in Australia 

have required careful use of water resources. These conditions, combined 

with the competition for water from agricultural users, have limited the use 

of water for flushing toxic blooms. 

Water Treatment after extraction 

Untreated water supplies are the most vulnerable to the impacts of cyanobacterial blooms. Supplies that are disinfected with an oxidant may give 

some protection against some toxins. Conventional water treatment such 

as flocculation, filtration and disinfection will remove the cyanobacterial 

cells and the toxins they contain provided that the cells are removed intact 

and a chlorine residual is maintained after treatment. Use of oxidants prior 

to flocculation and filtration is not recommended as it lyses the cells and 

releases the toxins. However, conventional treatment will have little effect 

on dissolved toxins. Additional treatment such as activated carbon or 

powerful oxidants such as ozone are needed to remove or destroy dissolved toxins. Most water treatment plants in parts of Australia that are 

Chapter 37: Economic Cost of Cyanobacterial Blooms
86

subject to cyanobacterial blooms now have the capacity to dose with powdered activated carbon (PAC) and in some cases have granular activated 

carbon (GAC) filters. The use of these additional treatments increases the 

capital and operating costs compared with conventional treatment.

Provision of alternative supplies 

If adequate treatment is not available alternative supplies may need to be 

provided. This may involve isolation of the contaminated source and the 

re–routing of other sources into the distribution system. Where that option 

is not available water may need to be tankered in or bottled water provided 

for drinking. In South Australia this has happened in two areas. During 

the Nodularia blooms in Lake Alexandra mentioned above, water was 

tankered in and made available at distribution points or used to fill existing 

water tanks. In 2000 a bloom of toxic Phormidium a reservoir servicing a 

small town in South Australia was forced off–line during a busy holiday 

period. Bottled water was provided to consumers and temporary treatment 

facilities installed at some commercial businesses.

Long Term Costs 

Prevention of future problems can involve dealing with the factors that 

cause blooms or improving the treatment of the water once the bloom occurs. 

Environmental Flows 

Increasing flows in regulated rivers to flush out existing blooms has been 

successful in some circumstances. Consideration has also been given to 

using increased flow to prevent blooms from forming. The feasibility of 

using this approach largely depends on the volumes of water required and 

competition for water from other users. Maier et al (2001) reviewed the 

options for managing cyanobacteria in the River Murray in South Australia. Blooms in that area of the river are associated with periods of thermal 

stratification. It was estimated that additional flows of 10,000 ML per day 

would be required to halve the risk of thermal stratification. If the flow 

was required for 1 month, the cost of the water would be $15 million. Mitrovic et al. (2003) reported on a similar study in the Darling River. That 

study indicated that flows of 0.05 ms-1 would preclude Anabaena blooms 

in the weir pools. In the reach of river studied, this related to discharge 

rates between 100 and 450 ML day1. Flow rates often fall below those 

stated in summer resulting in frequent blooms. However, it is not clear 

2 D.A. Steffensen 
 863

whether additional flows would be available to prevent blooms in summer. 

While environmentalists are a calling or greater environmental flows for 

rivers in Australia the competition from other users is rising making increasing flow to control cyanobacterial blooms more difficult. The introduction of water trading has further increased the competition for water. 

Covering storages 

For small storages cyanobacteria can be eliminated by removing light. Following a major cyanobacterial incident in small open storages, SA Water 

covered three storages at a total cost of $7.1 Million. The capacities 

ranged from 64 ML to 150 ML. 

Environmental improvement 

In Australia the increase in cyanobacterial blooms has intensified the attention on eutrophication and on nutrient reduction. Significant expenditure 

has been allocated to improve waste water treatment and to find alternative 

routes that will divert discharges away from rivers and lakes. Nutrient reduction, especially phosphorus is the main driver for treatment works upgrades. Improved land management including better management of riparian strips is also relevant. It is not always clear to what extent the 

environmental improvement programs are due to cyanobacterial blooms or 

the result of more general concerns about eutrophication. Atech (2000) estimated that in Australia the cost of environmental protection schemes attributable to cyanobacteria was $121 million per year. This included urban 

sewage and stormwater ($43 mill), agriculture and industrial waste water 

($33 mill), and rehabilitation of land and water resources ($45 mill). 

Overall costs 

Atech (2000) put the overall costs in Australia related to cyanobacteria in $ 

millions per year as: 

 

Cost Category Cost ($) 

Joint Management costs 9 

Urban extractive users 35 

Rural extractive users 30 

Non–extractive users 76–136 

Total 180–240 

Chapter 37: Economic Cost of Cyanobacterial Blooms
8

Confidence levels for cost estimates 

Direct costs to the agencies responsible for managing blooms such as 

monitoring, treatment and the provision of alternative water sources can be 

determined relatively easily. Costs to tourism and agriculture are more 

difficult to assess due to the range of people and activities that may be affected. Estimating the value of aesthetic appeal and environmental values 

is especially difficult. What value do we place on clean water as opposed 

to unsightly smelly scums? 

The cost of engineering works for prevention or management of blooms 

such as additional treatment, installation of mixers and roofing of storages 

can be estimated with reasonable confidence. It is more difficult to assess 

the costs and benefits of environmental measures such as improved waste 

water treatment. The extent to which these programs are initiated by concerns about cyanobacteria and the whether they will resolve the problem is 

often unclear.

Atech (2000) argued that the willingness of the community to pay for 

prevention of blooms is an indicator of the economic impact. This study 

also suggested that the cost of the environmental improvement programs is 

a conservative estimate. The estimate was based on the consideration that 

the programs should partially reverse costs currently incurred and would 

not completely resolve the problem. They proposed a multiplier of 1.5 to 2 

which places the annual economic impact at $180 million to $240 million. 

References 

Atech (2000) Cost of algal blooms. Report to Land and Water Resources Research and Development Corporation, Canberra, ACT 2601 ISBN 0 642 

76014 4 

Australian Drinking Water Guidelines (2004) National Health and Medical Research Council and the National Resoures Management Ministerial Council 

Department of Water Resources (1992) Blue–green Algae Final report of the 

NSW Blue–Green Algae Task Group. ISBN 0 7395 7886 0 

Falconer IR, Choice A, Hosja W (1992) Toxicity of the edible mussel (Mytilus 

edulis) growing naturally in an estuary during a bloom of Nodularia spumigena. Journal of Environmental Toxicology and Water Quality 7:119–123 

Maier HR, Burch MD, Bormans M (2001) Flow management strategies to control 

blooms of the cyanobacterium, Anabaena circinalis, in the River Murray at 

Morgan, South Australia. Regulated Rivers. Research & Management

17:637–650 

64 D.A. Steffensen 
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Mitrovic SM, Oliver RL, Rees C, Bowling LC, Buckney RT (2003) Critical flow 

velocities for the growth and dominance of Anabaena circinalis in some turbid 

freshwater rivers. Freshwater Biology 48:164–174 

Steffensen DA, Nicholson BC, Burch MD, Drikas M, Baker PD (1999) Ecology 

and management of blue–green algae (cyanobacteria) In Australia. Environmental Toxicology and Water Quality 14 (1) 183–195 

Walker C, Greer L (1992) The Economic Costs Associated with Lost Recreation 

Benefits due to Blue–Green Algae in New South Wales: Three case studies. in 

Hassall and Associates, Blue Green Algae: Final report of the New South 

Wales Blue–green Algal Task force, Department of Water Resources, Parramatta 

Chapter 37: Economic Cost of Cyanobacterial Blooms