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Economics Board Reviews Clearwater Subbasin Work Plan by Mike O'Bryant Columbia Basin Bulletin - April 11, 2003

Economists found little in the Clearwater River subbasin plan that would give the Northwest Power and Conservation Council much of an economic basis in the future to decide on funding among recommended habitat actions.

Recognizing that the Columbia River Basin's first completed plan was already in process when it completed its economic guidance recommendations for subbasin planning, the Council's Independent Economic Advisory Board said at its April 4 meeting that its recommendations, now in draft form, were not a criticism of the plan, but would instead show a basis for how to incorporate economics into future plans.

However, the IEAB recognized that a problem the Council will have in deciding funding for recommended habitat actions with all plans is that the guidance documents provided by the Council for developing plans are not mandatory.

"We recognized this is a bottoms-up process and that the guidance is not mandatory, so you will get a lot of variation," said Susan Hanna, IEAB member. She was referring to what the Independent Scientific Review Panel recognized, of which she is also a member, and which has already commented on the Clearwater plan.

She added that also means that it is unknown by planners what it will take to get a plan accepted by the Council and it will take acceptance by the Council before research plans can be funded. "How the Council will evaluate these plans and what weight they put on comments is still unknown," she said.

"Such variations among subbasin plans will not be helpful for the Council, because ultimately decisions will have to be made that cut across subbasins," the IEAB draft comments say. "The Council will eventually be allocating scarce financial resources across several subbasins, and information on cost-effectiveness should help guide those decisions."

In fact, the IEAB is concerned that there is not enough funding available to complete these economic assessments and recommends that better guidance is needed up front to control the types of information collected for the plans.

Roger Mann, of the IEAB, said the Clearwater plan, which is huge (just the Assessment section was about 450 pages), is still too general and that drawing economic conclusions from the information is not possible.

"The most refined level they got to for strategies or actions was not specific enough to generate an economic impact analysis," Mann said. "They were too qualitative."

In its draft review, which was written by Mann, the IEAB said that the Clearwater Plan is "focused on general goals and objectives, not actions."

"The Inventory provides a detailed list of ongoing projects in the region, but the Management Plan does not provide enough information about future priorities to suggest how future projects might be different from the status quo," the draft comments says. It went on to say that if future plans focus more on "evaluation of ongoing, proposed or potential projects as examples of actions that might be bundled to define strategies," they would likely provide better opportunities for economic impact and cost-effective analyses. "Project descriptions, with sufficient detail on biological and economic effects, are necessary in order to evaluate the cost-effectiveness of proposed actions, both within each subbasin and across subbasins."

In its guidance document, the IEAB had made several recommendations to subbasin planners as to how they could consider the economics of their plans and how to decide among actions based partially on economic analyses.

It said that the economic impacts of plans should be scoped early in the process while taking public comments, which the Clearwater subbasin planners failed to do. The IEAB also said that if planners laid out actions at public meetings, not just concepts, the comments they receive from the public might be different.

The IEAB recommended that the Assessment section of each plan describe the "relationships between stakeholders and the potentially affected natural resources, including the economic dimension of these relationships." The Clearwater plan provided useful information, but the "discussion tends to focus on the adverse impacts of human activities rather than the economic importance of them," the draft comments say. For example, Lewiston was not identified as a port town.

The IEAB recommends that each plan contain a general discussion of adverse and beneficial impacts and that each management plan should include a short cost-effective analysis, in which alternative projects or strategies are identified and evaluated.

"Strategy development should consider and reduce adverse stakeholder impacts while achieving beneficial improvements for fish and wildlife," the IEAB recommends. Plans should also include ways to compensate those who suffer the adverse impacts and a plan for cost sharing.

The IEAB will revisit and conclude its comments on the Clearwater plan at its next meeting in May.

The IEAB is a panel of economists created in 1997 by the Council to assess the cost-effectiveness of fish and wildlife recovery measures funded by the Bonneville Power Administration. The eight members are:

• Ken Casavant, chair, professor of agricultural economics, Washington State University and noted expert in the economics of the transportation sector.
• Roger Mann has broad experience in economic evaluation of natural resource projects.
• Joel Hamilton, professor emeritus of agricultural economics, University of Idaho and expert in the field of agricultural economics, irrigation, water use, navigation, local area impacts and non-market valuation of natural resources.
• Daniel Huppert is an expert in fishery economics, management and policy, and principal author, "Economics of Snake River Salmon Recovery."
• Hans D. Radke, freelance economist, adjunct professor at Oregon State University, chair of the Pacific Fisheries Management Council and noted expert in economic effects of fisheries.
• Lon Peters, Economic consultant, past senior economist for the Public Power Council and expert in Northwest electricity system configuration and economics.
• Noelwah R. Netusil, associate professor of economics, Reed College, and expert in non-market evaluation and environmental economics. She joined the IEAB in December 2002.
• Susan Hanna is also a member of the ISRP and ISAB and expert in fishery economics and management policy. She joined the IEAB in December 2002.

Related Sites:
Independent Economic Advisory Board: www.nwcouncil.org