Western Economists Question USGS Draft Klamath Recreational Study
by Klamath Water Users Executive Director Dan Keppen
posted to KBC 5/19/04
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An economist from Davis, California and a policy analyst from New Mexico State University are only a few of the critics to step forward and openly question a draft report on Klamath River recreational benefits prepared by the U.S. Geological Survey (USGS). The draft report - preliminarily leaked to the Wall Street Journal in November 2002 and heralded by environmental groups as justification for removing dams on the Klamath River – contains "severe problems" that limit its use as a basis for policy decisions, say economic experts.

Richard McCann, an economic consultant from Davis, California, reviewed Aaron Douglas' paper for the USGS entitled "CVM Benefits Estimates for the Lower Klamath River", which was presented at a Western Economics Association meeting in Seattle in June 2002. McCann believes Douglas’ paper has problems in many of the key economic assumptions and interpretations contained in the draft report, including a misidentification of avoided costs for electricity and agricultural production. The USGS report concludes that the benefits achieved by increased recreational use would far outweigh the costs of buying farms and forests, removing water supplies from California’s Central Valley, and removing hydroelectric dams.

"I read the paper with great interest knowing the potential implications to policy making," noted McCann. "Unfortunately, the paper had numerous problems that undermined any ability to draw policymaking implications."

McCann, a consulting economist who works on water, energy and environmental regulation issues, was not retained by any of the parties involved in the Klamath River dispute.

McCann is not the only expert who has concerns about the draft report. He noted that he discussed his observations with at least two other reviewers – one with the federal government, and one from Seoul University in Korea – who also found "significant, and different" problems, as well. A policy analyst from New Mexico State University (NMSU) has joined the chorus of critics skeptical of the draft report.

Ric Frost, who works for the Range Improvement Task Force at NMSU, pointed out numerous errors in the draft report that mirror the concerns noted by McCann. Frost and McCann point to critical problems in the way the report handles the contingent valuations survey and sampling methods. Both men also noted several misspecifications in the report, and instances where statements are not documented or referenced.

"An assertion without certification is not a fact," said Frost. He also points to a statement made in the report where the authors admit that their own procedure is flawed. "They should throw the analysis out right there," said Frost. "The report’s key assumptions are worthless."

Last year, McCann directly communicated his concerns to Douglas Posson at the USGS office in Ft. Collins, Colorado, but says his input was ignored. "USGS went ahead and published the report despite the obvious errors that I pointed out," said McCann. 

Within hours of the Wall Street Journal reporting on the existence of the draft study, a coalition of environmental groups had already obtained the report and issued a press release that claimed the Bush Administration stifled its release.

"The government does a great job of hiding data it doesn’t like," said Zeke Grader of the Pacific Coast Federation of Fishermen’s Associations (PCFFA). "The stench of the recent fish kill in the Klamath River is permeating to the highest levels of the Bush Administration."

What PCFFA and other environmental activists appear to have overlooked is the draft report’s proposal to impose a long-term moratorium on fish harvesting in the Klamath-Trinity system. This ban would include an end to all harvesting by commercial fishermen, halting marine harvesting by tribal fishermen, and "sharp declines" in freshwater harvesting by tribal and recreational fishermen.

"There is a strong consensus that habitat restoration should be complemented by a cessation of fish harvesting of Klamath-Trinity system stocks for a period of 12-years", says the USGS draft report.

Frost criticized the draft report’s treatment of the impacts associated with this action.

"The report does not identify the number of jobs that would be lost from fishing or the resulting ripple effect to downstream communities," he said. "Merchants who sell gasoline, rent boats, and sell groceries to sport fishermen will be impacted by such a proposal, but these issues are ignored in the report."

Despite the criticism of the USGS report by outside experts, environmental groups are using it justify their contention that farming practices in the Klamath Basin must change, and claim that the draft report is legitimate. Felice Pace, a long-time critic of Klamath Project agriculture, asserted in a 2002 opinion editorial that USGS scientists completed "rigorous internal and academic peer review" of the draft report.

McCann offers a different perspective.

"I came to the conclusion that no useful results could be drawn from the paper, that the paper would not pass peer review, and that in fact, in all likelihood, the entire survey process would have to be restarted from scratch," he said.