1. Economic Impacts of Critical Habitat Designation for Oregon Chub (oregonichthys crameri) Chris Cusack Judith Dempsey Biao Huang Taeyoung Kim Caiwen Wu June 4th, 2009 AREC 551

2. Objective This project will investigate the potential economic impacts of designating critical habitat for the Oregon Chub on the commercial, agricultural, industrial, and recreational sectors, over and above those impacts already made by its classification as an endangered species.

3. Overview Oregon Chub – description and background Endangered Species Designation vs. Critical Habitat Designation Economic Analysis Conclusion

4. Introduction The Oregon Chub is a small, minnow-like fish which favors backwaters with little or no current, silty and organic substrate, and ample vegetation for hiding.

5. Historic habitat The Oregon Chub is endemic to the Willamette valley of Western Oregon. They were formerly distributed throughout the Willamette River Valley in a dynamic network of off-channel habitats.

6. Changes in Habitat Conditions Alterations in natural flow conditions: – Dams (for flood control and hydropower generation) – Fill and removal activities Decline in Water Quality – Siltation from logging – Pesticide runoff Introduction of non-indigenous species

7. Invasive Species Consume resources essential to existence of Oregon Chub Directly prey on Oregon Chub Difficult to monitor or remedy

8. Historic Distribution of Oregon Chub in the Willamette River Basin Source: Markle 1991/Oregon Chub Recovery Plan

9. Source: Oregon Chub Recovery Plan 1998 Distribution of Oregon Chub in the Willamette River Basin

10. Oregon chub potentially occurs in these Oregon counties: Benton, Lane, Linn, Marion, and Polk county. (Map may reflect historical as well as recent sightings) Source: http://www.fws.gov/oregonfwo/Species/Data/OregonChub/

11. Endangered Species Act (ESA) Purpose: – protect and recover imperiled species and the ecosystems upon which they depend. Endangered species: – any species which is in danger of extinction throughout all or a significant portion of its range. Threatened species: – any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. (http://www.fws.gov/endangered/pdfs/esaall.pdf)

12. Criteria Used to Evaluate the Listing of A Species 1)Damage to, or destruction of, a species’ habitat; 2)Overutilization of the species for commercial, recreational, scientific, or educational purposes; 3)Disease or predation; 4)Inadequacy of existing protection; and 5)Other natural or manmade factors that affect the continued existence of the species.

13. Critical Habitat Critical Habitat can include areas occupied by the species, or those that are outside the geographical area occupied by the species at the time it is listed, but determined to be essential for the conservation of the species. Critical habitat may be established for species now listed as threatened or endangered and for which no critical habitat has previously been established. Critical habitat generally does not include the entire geographical area which can be occupied by the threatened or endangered species.

14. ESA and the Oregon Chub The Oregon chub was listed as endangered in 1993. A recovery plan was published in 1998. A 5-year review was published in 2008. Currently, there is a proposal to designate Critical Habitat for this species. On May 15 th, 2009, the Oregon Chub was down listed from “endangered” to “threatened”.

15. Consultation Costs Every analysis or project includes consultation costs. Consultation costs are a significant portion of overall costs (total percent will vary). Assumption: all calculations include consultation costs.

16. Impacted Activities Dams and Reservoir operations: – Hydropower – Recreation Logging Agriculture Property development – commercial/ residential/ industrial In-stream activities – dredging

17. Dams and Reservoirs Economic Impacts – Hydropower – Recreation Calculations – Opportunity costs of power generation – Opportunity costs of recreation

18. Hydropower Dams in Willamette Basin Dams # of Power Generator s Generated Power Total Storag e Proj. Cost UnitMwatt hrs. Acre- feet Millio n $ Big Cliff146,352N.A62.7 Detroit2393,539455,10062.7 Hills creek 2164,791355,50046 Foster2104,95660,70082.3 Green Peter 2235,96128,10082.3 Lookout Point 3297,325455,80088.2 Dexter187,797N.A88.2 Cougar2172,171219,00054.2

19. Opportunity Cost of Reduction of Hydropower Generation Suppose hydropower generation is the function of water storage volume: Then it will be reduced by:, where α is % reduction. The total loss in hydropower generation per year will be: – p: electricity price ($/mwh); – r : discount rate.

20. Recreational Reservoirs in Willamette Basin # of Recreation Areas Avg. yearly visitsTotal Storage Proj. Cost Fern Ridge5768,000116,8006 Cottage Grove5417,00032,9003.3 Detroit7735,000455,10062.7 Dorena5343,00077,60014 Dexter2321,000N.A88.2 Blue river366,00089,50032 Cougar664,000219,00054.2 Fall Creek5269,000125,00022 Hills Creek5109,000355,50046 Foster6590,00060,70082.3 Green Peter3230,00028,10082.3 Lookout Point697,000455,80088.2

21. Opportunity Cost of Recreation User expenditures (UE) for reservoir i: – : No. of people visiting – : Average annual household visitation frequency – : Individual daily user expenditure for reservoir i. Linear regression model: – : frequency of visitation; – : water level in mean feet; – : change in visitation for each one-foot change in.

22. Opportunity Cost of Recreation (Cont.) Total user expenditure per year due to a decrease in reservoir water level of Willamette river basin: where (b/V) is a percentage reduction in visitation.

24. Logging Oregon Chub thrive in small tributaries. Activities such as logging lead to siltation, filling in these habitats. Under Critical Habitat, logging practices must be altered: – reduction in total area; – more stringent controls leading to reduced yield.

25. Opportunity Cost of Logging Logging profit function: – q i : total timber harvest per acre; – P : timber price; – hc : harvest cost; – A i : area; – RC i : replanting cost. If logging is required to be reduced by a (0<a<1), then the associated profit loss for unit i would be: Total profit loss per year is:

26. Opportunity Costs of Agriculture Production reduction by changing farming practice. Runoff control cost from: – applying alternative materials; – changing irrigation method; – leaving alternate uncultivated; – Conservation tillage. So, the total profit loss per year is from: – production reduction; – additional runoff control cost.

27. Other Costs Property Development: – Future development may be reduced; – Existing structures not impacted; – Federal Permits/Safe Harbor Agreements. In-stream activities: – Must maintain habitat; – Impacts uncertain; – Changes from the natural state may make the habitat more sensitive to invasive species.

28. Aggregate Costs The expected present value of aggregate costs of the Oregon chub critical habitat designation for the future 20 years: – : consultation for activity i, – : the i th activity.

29. Oregon Chub vs. Salmon Salmon is a high-profile case: – Listed earlier than chub; – More recreation and economic activities associated with salmon. Difficult to split costs. Due to existing protection, many impacts of Critical Habitat designation for the Oregon Chub will come from land use in isolated, specific areas.

30. Benefits Benefits are difficult to determine: – Contingent valuation; – Impacts on other species; – Other environmental benefits. Assumption: – While the costs of Critical Habitat Designation are potentially high, the expected benefits outweigh the costs.

31. Conclusion Costs have the potential to be high. Costs spread through many sectors of economy. Local impacts relatively high. Additional overall impact may not be significant due to existing protections afforded to Salmon.

32. Willamette River – Past and Present Source: Sedell and Froggatt 1984/Oregon Chub Recovery Plan.