Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan

Matthew Kotchen, Michael R. Moore, Frank Lupi and Edward S. Rutherford

Land Economics, 2006, vol. 82, issue 3, 384-403

Abstract: 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-codes: Q43 Q57 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (28)

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