Loomis & Ballweber’s A Policy Analysis of the Collaborative Upper Colorado River Basin Endangered Fish Recovery Program: Cost Savings or Cost Shifting?

Discussant, Danielle V. DolanThursday, May 22, 2014ESP 212b – Spring 2014

UC Davis

John Loomis & Jeffery Ballweber

• 2000, Vice President, Association of Environmental and Resource Economists

• 2004, Western Ag. Economics Assoc. Distinguished Scholar Award

• 3 books • 234 scientific journal articles

• Pickering Firm, Inc.• Mississippi Water Resources

Association• Mississippi Water Resources

Institute • University of Oregon School of

Law

L&B analyze a collaborative approach to implementing the ESA.

L&B seek to find if the Recovery Program resulted in actual net social benefit (cost savings), or simply cost-shifting from water users to tax payers.

$costs ?

L&B raise important questions re:• who pays for environmental

damages? • env. policies to address neg.

externalities?

L&B use traditional BCA methods to calculate direct costs, indirect costs, and cost savings from the collaborative project.

Focus QuestionsCost-effectiveness “net social benefit to society”Assumed Management Objective: H20 Managers

provide water supply to water rights holders at a reasonable cost to enable further economic development

Assumed Management Objective: ESA

to preserve species habitat and support species recovery

Key Constrain ESA n-stream flow-requirements

Spatial Scale Upper CO River watershed (get the acreage

Management Choice

Collaborative project/ programmatic management/ stakeholders, vs. individual s 7 Consultation (alternative habitat protections vs. direct cubic-acre for acre water replacement.

Continuous or Discrete Management?

Continuous, for the programmatic approval period (through…)

The ESA attempts to mitigate a market failure through non-market “command & control” regulation.

Evaluation criteria

Direct costs Costs savings Lost opportunity

costs Species valuation

[meta-analysis]

Negative Externalities

Water as a common-pool resource Restricted access

(excludability) Appropriative water

rights (rivalry) Biodiversity as a pure

public good

The collaborative project provides market-based flexibility and economies of scale for more thorough & cost-effective compliance.

Phase Elementhabitat management instream flows for fish recoveryhabitat development and maintenance

structural activities (eg., fish ladders)non-structural activities (eg., floodplain restoration)

supplement & reestablish population

fish hatcheries construction, stocking restored habitats

Nonative species control

Sportfishing to remove predators

research, monitoring and data management

Track effectiveness in meeting species recovery goals & support adaptive management.

"The direct costs of the Recovery Program's multipronged approach have been substantial."

"The success of the consensus based multi-stakeholder … Program provides a model for other similar ESA conflicts that pit endangered species protection against development activities.".

"It is extremely difficult to track or allocate the true cost of ESA litigation for federal, state and local governments and agencies or the private sector."

L&B do a particularly good job identifying potential costs, cost savings, & cost distribution.

L&B fail to define “society as a whole;” distribution of net benefit is thus unclear.

L&B fail to account for potential lost benefits from collaboration (benefits of BaU).

$$$$$

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A follow-up evaluation of success post-implementation would reveal actualized costs & benefits.

Including social science scholars with expertise in collaborative governance and decision-making processes would enhance the analysis.