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In search of an inclusive approach: Measuring non-market values for the effects of complex dam, hydroelectric and river system operations

Benjamin Jones (), Robert Berrens, Jenkins-Smith, Hank, Carol Silva, Joe Ripberger, Deven Carlson, Kuhika Gupta and Wesley Wehde

Energy Economics, 2018, vol. 69, issue C, 225-236

Abstract: Hydroelectric dams have social, cultural, and environmental impacts on society through both alterations of riverine effects (both downstream and in reservoirs) and the production and distribution of hydropower in a broader geographical area. Management of complex dam, hydroelectric, and river systems frequently requires tradeoffs between alternative operational profiles, each with its own set of heterogeneous external effects. Substantial evidence suggests that segments of the public hold non-market values, including non-use values, for both riverine environmental effects and a wide array of external effects of hydropower production and distribution. However, non-market non-use valuation exercises related to re-purposing dam operations continue to focus exclusively on downstream external effects, calling into question their usefulness in decision-making processes. Focusing on the Glen Canyon Dam (GCD), a critical source of hydropower and peaking capacity on the Colorado River, US, we measure non-market values, expected to be significantly composed of non-use values, using the contingent valuation (CV) method for two proposed management options inclusive of multiple social, cultural, and environmental effects of both downstream riverine effects and hydropower production and distribution in the broader basin. To provide a defensible basis for inclusion of relevant external effects in the valuation exercise, we undertook a multi-year study of the GCD policy domain. Using a nationally-representative, address-based CV internet survey, results from an advisory referendum voting format suggest that the average US household has a median net willingness to pay (WTP) to continue existing GCD operations of $21.51 per year [95% CI: $2.98, $40.04] after accounting for WTP to change operations under the US Department of Interior's preferred alternative. Net non-market value for continuing operations is $2.9 billion per year, aggregating across US households.

Keywords: Colorado River; Glen Canyon Dam; Hydropower; Non-market; Non-use values; External effects of hydropower (search for similar items in EconPapers)
JEL-codes: Q42 Q48 Q51 Q53 Q54 Q57 H41 D73 (search for similar items in EconPapers)
Date: 2018
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