Lower Snake River dams return only 15 cents on every dollar invested

A return of only 15 cents for every dollar invested?  It doesn’t sound like much, especially when compared with the estimated $4.30 return for every dollar that a free-flowing Lower Snake River is expected to bring. Earth Economics’ latest analysis took a look at four dams along the Lower Snake River in Southeast Washington, investigating whether the dams’ benefits outweigh the costs.

The Lower Snake River’s four dams generate about 2.8% of the region’s hydropower and provide navigational benefits for barge shipments out of Lewiston, Idaho, but do these benefits really outweigh the costs?  This latest Earth Economics report makes it clear they don’t.  In fact, the projected benefits of a free-flowing river far outweigh the costs.

To start with, the dam operation costs are too high considering the amount of electricity produced.  With issues from aging infrastructure, decreased water flows due to climate change, and highly competitive power market pricing, the Lower Snake River dams are rapidly becoming far more of a burden to the region than a benefit.

It isn’t simply the rising operation and maintenance costs and increasing power surplus within the region that contribute to the poor benefit-cost ratio, however. The area is also losing recreational value in the form of foregone consumer surplus, an economic measure that can be used to represent the value of recreational experiences. The current state of the dams provides little recreational benefit, but a free-flowing Lower Snake River presents unique recreational opportunities that could attract visitors from across the western U.S and beyond.

For years, the dams’ advocates have claimed that dam removal would be disastrous for local communities as the dams provide much-needed jobs in the region. But Earth Economics’ analysis of the regional impacts actually shows that dam removal should lead to more jobs for the region.  The dams are restricting the emergence of a recreation tourism economy.  Not only would this recreation tourism economy replace any jobs lost to dam removal, but it should in fact increase jobs and stimulate economic activity across the region. 

The first few years alone after dam removal would bring in an estimated $500 million in outdoor recreation-related expenditures.  This level of expenditures would support and generate more jobs (an estimated 4,000 full- and part-time jobs), contribute to nearly 150 industry sectors (many of which are not directly associated with the recreation industry), increase overall tax revenue, and boost incomes. So, in terms of the anticipated recreation tourism economy from a free-flowing river, dam removal is only expected to benefit the area with more jobs and revenue. Not only that, but a free-flowing Lower Snake River may also yield a benefit-cost ratio of over 4.3 – in other words, for every dollar invested in a free-flowing river, the region could receive $4.30 in benefits!

With such strong evidence for the benefits of a free-flowing river, outreach to inform key leaders is already being done – President Obama, the Assistant Secretary of the Army for Civil Works, the Center for Environmental Quality, and other federal-level decision makers – and local legislators in Washington, Idaho, and Oregon will be included. The region already loses $2.4 billion in economic benefits each year by keeping the dams. It’s high time that the dams’ impact on the region was re-evaluated.

*Photo Credit: Tony Grover via Flickr