We examine the tradeoffs between utilizing multiple ecosystem services in an economic model of the Lower Mississippi-Atchafalaya River Basin. We show how economic development in the basin degraded the ecosystem, but diversified the economy. A degraded ecosystem and more employment opportunities elsewhere reduced the region's reliance on agriculture and other resource-related industries such as fishing. We compare the size of actual economic damages from reduced water quality associated with agricultural runoff in the upper basin with those that would have occurred without economicecosystem feedbacks and general equilibrium adjustments in the economy. We find increases in crop prices and subsidies to agriculture can increase risk of damages to the ecosystem in three ways: 1) by increasing total agricultural area, 2) by encouraging farmers to use more intensive agricultural methods, and 3) by competing for labor and capital with other types of economic activity that that are less likely to degrade the environment.