RT Journal Article
SR Electronic
T1 Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 384
OP 403
DO 10.3368/le.82.3.384
VO 82
IS 3
A1 Kotchen, Matthew J.
A1 Moore, Michael R.
A1 Lupi, Frank
A1 Rutherford, Edward S.
YR 2006
UL http://le.uwpress.org/content/82/3/384.abstract
AB We conduct a benefit-cost analysis of a relicensing agreement for two hydroelectric dams in Michigan. The agreement changed daily conditions from peaking to run-of-river flows. We consider three categories of costs and benefits: producer costs of adapting electricity production to the new time profile of hydroelectric output; benefits of reductions in air pollution and greenhouse gas emissions; and benefits of improved recreational fishing. The best estimates suggest that the aggregate benefits are more than twice as large as the producer costs. The conceptual and empirical methods provide a template for investigating the effects of an environmental constraint on hydroelectric dams. (JEL Q43, Q57)