Introduction (as letter to Chairman Cassidy)
During the past two months the Independent Economics Analysis Board (IEAB) prepared the enclosed Review of the IEAB's Activities and Contributions to NPPC Fish and Wildlife Planning. This document serves as an update for the Council and as a general background document for those not familiar with the IEAB. The review demonstrates the wide ranging work that the IEAB has done for the Council, and it also shows that economic assessment of projects and strategies in fish and wildlife planning are a useful adjunct to the scientific and technical assessments performed by the ISAB and ISRP.
The IEAB's work to date has generally involved three types of activities: setting general guidelines for the use of economics in planning, reviewing reports and analyses of others, and completing cost-effectiveness analyses of specific projects. We believe that these products have been thorough, accurate and innovative in presenting the technical material of economic analysis in a usable form. Ultimately, however, it is difficult for us to assess the degree to which our work contributes to the Council's decision process.
Recent comments by Council staff and the ISRP suggest that the IEAB might be more productively engaged in examining broad trade-offs in the fish and wildlife program. The IEAB identifies two categories of trade-offs: (1) trade-offs between objectives, and (2) trade-offs among alternative actions intended to achieve a given objective. An example of the first type occurs, for example, when the Council must choose between hydropower and fisheries, or between anadromous fish and resident fish. The second category of trade-off could involve consideration of mainstem operations, tributary habitat enhancement projects, or artificial production projects to protect a given listed salmon ESU. To date, the IEAB has been focused on the second type of trade-off using cost-effectiveness analysis. Expanding our role to broader trade-offs among objectives will require the use of more complex assessment techniques. These techniques could include multi-objective decision-making tools or economic benefits measurement.
The IEAB used this self-evaluation process to consider its role in future fish and wildlife planning. To begin this process, we have developed the following list of potential topics for broader investigations.
- Develop better methods of cost-effectiveness analysis to meet specific Council decision needs. This would focus on the feasibility of measures of costs and effectiveness for artificial production, habitat enhancement, and mainstem operations. In particular, the IEAB needs to determine what sources of information and measures of effectiveness are appropriate for comparison of projects across regions and across types of improvements.
- Examine trade-offs among alternative hydrosystem objectives, and among fish and wildlife objectives, recognizing that the cost of pursuing any one objective is often the foregone benefit of pursuing other objectives. The IEAB will work with the ISAB and other science advisors to first, identify and develop methods for analyzing and describing the physical tradeoffs, and, second, to develop common measures of the costs, impacts, and other economic consequences.
- Collaborate with ISAB and ISRP on the selection of elements for the Council's Fish and Wildlife research plan, understanding that key biological uncertainties have consequences for fisheries management and power system operation, and that these consequences often have economic costs. The IEAB could add operational consequences and associated costs to the criteria for selection of research projects.
- Re-cast the Hatchery Economics Phase II project to focus on the economics of specific projects that are currently funded or are being considered for funding under the Fish and Wildlife Program. To establish effectiveness measures for supplementation and conservation hatcheries, the IEAB should collaborate with APAC and ISAB members to develop appropriate measures of effectiveness. Also, the IEAB will need to develop a means to partition costs for supplementation and conservation programs from overall hatchery costs.
- Continue to provide reviews and comments on economic analyses submitted by other agencies and on specific F&W projects at Council request
We would appreciate the Council's and Council Staff's reactions to these possible avenues of future activities. To focus the IEAB's work on any or all of these will require close coordination between the Board and the F&W staff and Council members. The IEAB would like to begin a dialogue with the Council and the science advisory committees regarding the IEAB's role in this broader policy arena. The IEAB is prepared to make a presentation to the Council in order to explain this report further and to get feedback from the Council regarding our past performance and future role. Please let us know whether and how you would like us to proceed with this important planning process.
Ken Casavant, Chair
Independent Economic Analysis Board