PACIFIC SALMON RESTORATION: TRADE-OFFS BETWEEN ECONOMIC EFFICIENCY AND POLITICAL ACCEPTANCE

I. INTRODUCTION In a 1997 article, Jonathan Brinckman of the Oregonian concluded that the $3 billion effort to save salmon in the Columbia River Basin was a failure. He attributed the failure to "intensively competing interests and public spending without accountability or standards by which to gauge success." Brinckman noted that the spending had lead to "a salmon recovery culture: a deep layer in government and private industry of full-time scientists, regulators, administrators, and researchers," whose livelihood ostensibly depends on working to better understand the problem. This salmon recovery culture coupled with public pressure to be seen as doing something, have led to a de facto recovery strategy of study, tinker, and hope. Equity issues, burden of proof requirements, and the need to be right provide the motivation for agencies to avoid taking controversial actions. Uncertainty and lack of information provides the rationale for not taking direct action. Studying and tinkering with various elements of the problem saves face by allowing management agencies to be seen as doing something. Finally, the existence of a rent-seeking, dependent recovery culture reinforces the study and tinker approach. The result is that the status quo is extremely stable as long as the funding to study and tinker with the problem is maintained and there are no major shocks to the system. In addition to the study and tinker approach, another major threat to the success of conservation efforts is pressure from competing interests. Despite calls for targeting of funds and prioritizing problems, pressures to spread funds more evenly over interest groups or congressional districts and taxpayers are frequently present. A case in point is the Environmental Quality Incentive Program (EQIP), which has as its overall goal the targeted allocation of funds to solve specific priority environmental problems. Despite this overall goal, Congress, the U.S. Department of Agriculture (USDA), and the states all added provisions with the explicit intent of spreading money in a more equitable fashion. Examples of such spreading of funds include the requirements that 50% of the funds be spent on livestock-related problems; that no more than 65% of the funds in any state be allocated to the priority areas, leaving a minimum of 35% available statewide; the establishment of maximum funding levels for priority areas to ensure that more areas receive funding; and establishment of arbitrary limits on the maximum dollars per participant or number of years for which funding can be received. In addition, many of these conservation programs utilize on-site physical criteria to determine restoration areas. As will be shown, this can lead to a misallocation of funds if threshold and correlation effects are ignored. This article examines the targeting of conservation efforts for enhancing salmonid habitat in the Pacific Northwest. The authors present a case study that analyzes the impact of habitat investments on salmonids abundance using biological, hydrologic, and economic models estimated for the John Day River basin in central Oregon, where substantial habitat investments to improve anadromous fish production are under way. This article will show that decisions based on political equity concerns or on-site physical characteristics may actually lead to the lowest possible benefits to society from salmon recovery and protection. In most salmon habitat investments, there are likely to be strong scientific nonlinearities that mitigate against the most politically palatable allocation criteria. These scientific nonlinearities may make the political resolution of salmon recovery more difficult. However, with the appropriate application of economic analysis and natural science data the economic efficiency of public spending on salmon recovery could be improved. The next section provides a brief review of the literature on riparian conservation and habitat enhancement. …