South-Western College Publishing - Economics  
Salmon are just going to have to deal with those dams!
Subject Bush Administration will not remove dams to save endangered salmon.
Topic Economic Analysis; Economics and the Environment
Key Words

dam, environment, salmon, endangered

News Story

Much to environmental activists' dismay, the Bush Administration recently stated that it would not consider removing dams along the Columbia and Snake Rivers in the Northwestern U.S. to save 11 endangered salmon species.

Dams provide humans with significant benefits, in the form of recreation (lakes created behind the dams), electricity, as well as a way to stem flooding in some areas. At the same time, these dams impose costs on humans, because of the environment that is destroyed when a river is backed up. Further, since salmon swim back upstream and spawn where they themselves were born, dams pose the biggest threat to salmon population regeneration. Losing these salmon species would impose costs in the form of loss of biodiversity, lost food, as well as lost recreational benefits of fishing. Saving the salmon species would certainly recoup those lost costs, but at the same time, saving the fish is costly. Currently, fish ladders and other mechanisms exist to help salmon move upstream through dammed areas, but these mechanisms have not been enough to save 11 salmon species native to the Northwest. The Clinton Administration had repeatedly argued that dam removal should be considered only as a last resort, given the enormous cost and impact removing the dams would have on the surrounding ecosystem, but the Bush team appears to have no interest in protecting these salmon in any proactive way.

The Bush Administration argues that the eight dams on the lower portions of these rivers make up the salmon's environment, and to remove the dams would do far more damage to the lives of the salmon than it would help. Also, the Bush Administration notes other ways to help salmon, such as creating water-slide-like mechanisms to help salmon move around the dams, or carrying the fish around the dams. Undertaking these kinds of projects would cost an estimated $6 billion over 10 years, much less costly than the enormous (but yet uncalculated) cost of removing a dam from a river.

Questions
1.

As stated in the summary, saving the salmon would create benefits for the US, as well as create additional costs. Use a graph of marginal benefits and marginal costs of saving salmon to illustrate the Bush Administration's opinion. Given that the Bush Administration has argued that dam removal would prove far too costly to implement, where would dam removal to aid the salmon lie relative to the equilibrium amount of effort to save the salmon?

2. Salmon extinction was not considered as a problem when the Columbia River was dammed, nor do these fish receive any benefits from the construction of the dam. Why, then, are we considering the impact of the dams on the salmon? Explain using economic reasoning.
3. Environmentalists' concerns regarding the impact of dams on the salmon life cycle revolve around the external costs of the dam construction, as opposed to the actual costs or benefits received from it. In the presence of these external costs incurred from the dams, would you argue that are there too many dams, or not enough dams? Why? Explain carefully.
Source Felicity Barringer. "U.S. Rules Out Dam Removal to Aid Salmon." The New York Times. 1 December 2004.

Return to the Economic Analysis; Economics and the Environment Index

©1998-2005  South-Western.  All Rights Reserved   webmaster  |  DISCLAIMER