Increasing stream flows to sustain salmon in the Northwest: an economic and policy assessment

Abstract

According to biologists, increasing streamflows in the Pacific Northwest is essential to restore and maintain the populations of salmon and other native fishes. Since agriculture is the principal source of surface water diversions, accounting for about 80 percent of the total for the region, any efforts to augment streamflow will necessarily concentrate on reducing irrigation diversions. The likely costs of any actions to protect salmon are a central public concern and an important policy consideration, and in this particular case, these costs will depend directly on the impact that reducing irrigation diversions will have on farm enterprises in the region. This analysis appraises these costs and finds that they are likely to be modest if an efficient approach is taken to increasing streamflows. These estimates are based on evidence from market transactions for individual water rights, sales of irrigated farm land, and from a number of economic studies and cost estimation techniques. Our calculations indicate that the cost of water ranges from $1 to $25 per acrefoot, which, for a broadly based regional program to restore and maintain healthy fish populations, translates into annual costs of between 0.5 and 4.0 percent of the net farm income from all irrigated farms in the region, or between $1 and $10 per person in Washington, Oregon and Idaho. The analysis cautions, however, that some actions aimed at restoring salmon may be excessively costly, largely ineffective, or both—for example if high value irrigation water is returned to the wrong streams at the wrong times. In addition, it should not be assumed that by simply introducing water markets among farmers, or by promoting adoption of improved irrigation technologies, that streamflows will increase or that salmon will benefit from these changes. For these or other measures to contribute to the restoration of salmon stocks, and to do so in a costeffective way, will require creative institutional arrangements and attention to biological and economic information.