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An Open Letter to River Network on Environmental Economics


The River Network’s approach to economic analysis is that it is a useful last resort when other methods fail, that economic methods are often distasteful to environmentalists, and that they are difficult and expensive to perform. The BRSF relies heavily on economics as an argument for river protection in our watershed. We would like to describe the reasons why we find economic analysis useful and persuasive.

PROS AND CONS OF ECONOMIC ANALYSIS

Often, the source of the struggle between environmentalists and developers is that the environmentalists argue in emotional terms and the developers argue in financial terms. Economic analysis puts the value of a river in the same terms that developers use — dollars and cents. Economic analysis is more than just a tool to evaluate the benefits of a clean river — it is a means of discussing differences on common ground.

Legislators look at the number of jobs created and the amount of tax revenue generated from a proposed development, and weigh those against the pro-environment arguments. Our responsibility is to provide legislators with economic arguments that favor environmental protection. If we can show that a clean river creates as many jobs as a new development project, or that a resulting decrease in water quality would lose as much revenue as a new project will take in, then legislators can justify river protection to themselves and to voters at the next election.

And what about the emotional values? We can maintain our beliefs amongst ourselves, and we can offer emotional arguments to people who are ready to listen to them. But we should not provide emotional reasons for, say, stopping a proposed development project which would damage a river. Development’s primary purpose is to benefit the economy, and if we can demonstrate that a proposal will damage the economy, the development proponents will lose. Development has no emotional value. By undermining its economic value, we win. And when we win the economic argument, perhaps more members of the public will then listen to our emotional arguments as well.

MEASURING INTANGIBLE VALUES

Intangible benefits can be assigned a dollar value. More importantly, they should be, because if we ignore them, they will counted as zero. The techniques for measuring intangible recreation and aesthetic values are easy and inexpensive.

The method for measuring intangible recreational value looks at the number of people who use the river and how much time they spend to get to the river. The expenses people incur to travel to a river roughly measure their enjoyment of the river. This technique, called the “Travel Cost Method,” is accepted by the US government for use in federal cost-benefit analyses.

The technique for calculating the value of natural beauty looks at how many people in the region spend their money to support environmental causes. The amount of money donated to environmental groups is a “proxy” equivalent of the intangible non-recreational benefits of a river. The BRSF calculated the annual intangible non-recreational benefits of the Buffalo National River at $6M using this technique.

Using the Travel Cost Method, the BRSF estimated the intangible recreational value of the Buffalo National River at $37M per year. This is added to the tangible recreational value of the river (the amount of money spent on recreational equipment, rentals, and so on), which for our river is $4M, yielding a total for all river benefits of $47M.

The annual value of logging and ranching in our region is $36M. This figure is much higher than the tangible benefits of the river, but is less than the total including intangible benefits.

Do these techniques adequately measure the intangible benefits of enjoyment of a river? Maybe and maybe not, but any estimate is better than simply stating that the intangible benefits cannot be measured. Even those with philosophical objections to “commodifying” intangible values would agree that a value of zero is too low! If we say instead “the intangible value of our river is $43M,” and we back it up with facts, then that figure will be counted as a benefit. Legislators may disagree with vague arguments about intangible benefits, but they have a hard time ignoring the hard logic of economic figures.

CONSERVATION EASEMENTS

River Network’s book describes conservation easements as an expensive and difficult means of river protection. Our experience with easements during our first year of operation is counter to that description.

A conservation easement means that land owners give up the right to ecologically harmful activities on their land. Since other uses of their land are not affected, the price of easements is less than the price of purchasing land outright. Furthermore, since an easement is appended to the land’s title deed, it need not affect the entire parcel, but only the most ecologically sensitive acreage. For example, BRSF easements limit cattle grazing and logging on the land within 100 feet of tributaries, or on steep slopes or ravines near tributaries.

The cost of good land on running tributaries is about $2,000 per acre in our region. A 100-foot corridor therefore costs about $50,000 per mile of tributary. We pay for easements over a 10 year period, so a mile costs us $5,000 per year. While that cost is substantial, it is not out of reach for grassroots river organizations. For example, our basic membership is $35 per year, so it takes about 150 members to support easements for each mile of tributary.

More importantly, compare the cost of purchasing easements to the costs of conducting a lawsuit or mounting a lobbying effort. For comparable costs, the river protection is permanent and assured. Laws are subject to political whim, and hard-won gains can be reversed by elections (as with the dozens of environmental laws currently under attack in Congress!).

The BRSF does not convey our easements to any government agency. We recommend against involving any government agencies in easement contracts because doing so implies long delays and control from outside the local region, which discourages many land owners from selling. Avoiding government involvement also precludes “backlash” from Wise Use proponents — they cannot fight against voluntary private transactions.

HEARTS AND MINDS

To successfully protect a river in the long term, we must have the support of local residents and land owners. The purpose of all environmental economics is to win over the hearts and minds of the people who live near the river.

Why do land owners act on their land in a way that damages the river? Not because they like dirty water — but because they earn money at it. Economic methods let land owners earn money and protect the river simultaneously.

Why do legislators vote for development that degrades water quality? Not because they want to destroy rivers — but because they want to improve the economy. Economic analysis gives legislators a rationale to vote for economic improvement and environmental protection simultaneously.

Rather than fight land owners and legislators, we can have them on our side, working with us to maintain pristine rivers.

The BRSF offers information on conservation easements to all US conservation groups, and offers economic and political analysis services to any river activist or organization.


BRSF, Box 5003-161, Harrison, AR, 72602
Voice mail: (501) 634-2014.
E-mail: brsf@webmerchants.com


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