Subbasin planning may need to consider two types of economic issues; 1) economic impacts, and 2) cost-effectiveness. This paper provides general guidance to help planners identify when economic analysis is required, what level of detail is appropriate, and how to conduct both types of analysis and present results.
As a practical matter, economic impact analysis may be required to address concerns of stakeholders that will be identified during the public involvement process. Subbasin strategies and projects should be designed to minimize or avoid adverse impacts. Unavoidable negative impacts may be addressed by direct payments or other program elements that compensate those adversely affected, while beneficial impacts may provide a basis for sharing program costs with those enjoying the benefits.
Cost-effectiveness analysis is required by the Pacific Northwest Electric Power Planning and Conservation Act (the Regional Act). Planners should consider cost-effectiveness for local strategies or projects that are alternative means to the same biological objective. Also, planners should provide information on the physical or biological benefits, and the economic costs, of all strategies or projects. This information is needed for cost-effectiveness analysis at the regional level.