1. 1 Analyzing Life-cycle Environmental Impacts of Local development Initiatives Using Regional Economic and Environmental Input-Output models Dr. Satish Joshi Department of Agricultural Economics Michigan State University International LCA Conference, Seattle Sept 22-25, 2003

2. 2 Research Goals zEvery development project has economic and environmental impacts zInformed decision making requires the community and planners to consider and evaluate both impacts zThe goal is to develop a watershed information tool (WIT) to help estimate these impacts

3. 3 Research Components zEconomic impact analysis module (Conventional Regional IO model) zEnvironmental database zUser friendly software development zCase studies illustrating the use of the tool

4. 4 Project Effects zDirect effects yDirectly due to project activities zIndirect effects y Due to increases in the outputs of industries supplying inputs to the project activities zInduced effects y Additional household income will lead to increased consumption expenditures and increased output of food, clothing etc. zLocal effects v/s Total effects zOne time activities v/s continuing activities

5. 5 Economic Impact Module zRegional input-output model for the Muskegon River Watershed zSpecial watershed level dataset z78 zip code areas over 13 counties z528 sector detail zBased on national technical coefficients, adjusted with a regional purchase coefficient vector.

6. 6 Economic Impact Module zInput yProject cost components [Labor, different materials, services] zOutput : Direct, Indirect and Induced effects on yLocal employment yOutput of various sectors yLocal wage income, other income yBusiness Tax revenues

7. 7 Environmental Impact Module zIncreased production and consumption imply increased pollutant emissions and resource use zEstimate emission factors and resource use intensities for different sectors and households zLink with economic module to estimate total changes in emissions and resource use

8. 8 Environmental Impact Module zAir, water, land emissions zEnergy, minerals, water consumption zSummary indices yGlobal warming potential, Acidification potential, eutrophication, toxicity weighting, total energy zMonetary valuation zCarnegie Mellon University’s EIO-LCA+

9. 9 Software zInput [Project cost estimates] zIdentifying appropriate industry sectors zEconomic impact analysis (RIO model) zEnvironmental impact analysis zOutput Reports generation

10. 10 Case Study: Middle branch River Restoration zTributary of Muskegon River z33 Miles long, Osceola County zOld dam in Marion Village zMill Pond 26 acres zDam is unused, safety hazard, thermal pollution (6-9 degrees higher), No cold water fish down stream zMill pond is sediment filled, shallow, doesn’t support fish or recreation

11. 11 Project Components zDam Removal and River restoration zMill pond retaining berm construction zMill pond dredging and restoration zRecreation facilities [Walkway, bridge, fishing platforms, boat launch area]

12. 12

13. 13 Project Cost zFeasibility study by Progressive AE, Grand Rapids zEstimated cost $4.28 million zEstimated direct labor costs $2.02 million zRiver restoration +berm =$1.988 million zPond Restoration = $2.043 million zRecreation Elements=$0.487 Million

14. 14 Project cost components

15. 15 Economic Impacts zLocal Employment Generation (annual FTE) yDirect = 47.8 yIndirect = 24.2 yInduced = 5.6 yTotal = 77.6 zLocal Economic Output $1.98 Million zLocal Personal Income $0.089 Million zIndirect Business Taxes $0.073 Million

16. 16 Environmental Emissions (indirect + Induced) zEnergy use 4.04 TJ zConv. Pollutants4.86 MT zGHG emissions 305.35 MT CO2eq zFuels 3.77 TJ zRCRA Wastes0.41 MT zToxic Releases0.016 MT zToxic Releases (wtd) 0.097 MT CMUET

17. 17 Direct Environmental Benefits zMain direct ongoing benefit is restoration of 16 miles of cold water fishing stream zOther benefits are ySafety risk reduction, Habitat improvement for other species, Sediment, nutrient, water quality improvement, Aesthetics zMostly estimated outside the WIT

18. 18 Michigan Angling Demand Model zEstimates effect of water quality changes on fishing trips statewide by type and county z16 miles cold water fishing stream restoration will result in about 2051 fishing days increase in Osceola county zUsing an estimated average spending/visit we also calculate ongoing annual economic and environmental impacts

19. 19 Assessing products (LCA) v/s local development initiatives zIO approach is valuable since both economic and environmental impacts can be quantified. zLocal effects and induced effects are important zAssessing direct effects and ongoing effects may be more complex

20. 20 Acknowledgement This research was funded by grant from the Michigan Great Lakes Protection Fund.