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. Dolan Thursday, May 22, 2014 ESP 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 Questions Cost-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 ConstrainESA n-stream flow-requirements Spatial ScaleUpper 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. PhaseElement habitat managementinstream flows for fish recovery habitat 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 controlSportfishing 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). $ $$ $ $ $

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.