Economic Valuation of River Systems

Economic Valuation of River Systems

New Horizons in Environmental Economics series

Edited by Fred J. Hitzhusen

The book applies benefit–cost analysis and a wide array of non-market and distribution economic valuation methods in ecologic context to determine the pay-off and distribution impacts of various infrastructure and water quality improvements to eight river systems in the Great Lakes region of the US. The generally positive results have important implications for public policy and future research.

Chapter 4: The Economics of High-head Dam Removal in an Ecological Context: A Case Study of the Ballville Dam, Fremont, Ohio

Sarah A. Kruse, Timothy C. Granata and Ulrike Zika

Subjects: economics and finance, environmental economics, valuation, environment, environmental economics, valuation, water


Sarah A. Kruse, Timothy C. Granata, and Ulrike Zika INTRODUCTION Over the past two centuries the installation of dams, built mainly for economic reasons such as power generation, water supply, irrigation, or flood control, has transformed America’s rivers. There are now over 76 000 registered dams (2 meters or higher) and an estimated 2 million dams of smaller size, and in many cases dams have led to environmental changes in both the river and surrounding habitat. More attention has been given recently to the effects of dams on the environment due to changing social values, safety issues related with aging structures, and an increase in scientific information on the long-term effects of dams (Heinz Center, 2002). When assessing the discounted future flow of economic values for a dam, the typical life expectancy of the structure is normally considered to be 50 years. On the formal list of dams maintained by the United States Army Corps of Engineers (USACE), more than 30 percent are already over 50 years old, and by the year 2020 over 80 percent (60,000 dams) will have exceeded their typical life expectancy. In many cases, the structural integrity of the dam has been compromised or is obsolete, and the dam is also no longer being used. Of the dams officially accounted for in the United States, more than half will be up for license renewal in the next decade (Liggett, 2002), and for many, structural obsolescence will require that a decision be...

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