Monday, August 25, 2008

Salmon vs. Gold

Interesting issue from Alaska:

We have a renewable resource vs. a non-renewable resource, externalities, public goods, non-use values, quality standards ... what other econ issues do you see?

This would be great material for an essay question... some day.


Drew Moxon said...

I don't know much about Alaskan wildlife and geography but the anti-mining side might also try surveys with contingent valuation or travel-cost approach to add tourism value to their estimates. The mining proponents could appeal to the state, however, because of the likely corporate taxes that would come as a result of mining operations (which I would think would outweigh taxes from tourism and fishing).

Dr. Peter Schuhmann said...

Good point Drew. For those who have not yet had any environmental econ, Drew is referring to attempts to estimate the value of natural assets (in this case the river) derived from both direct and indirect uses.

Consumer surplus, for example, could be estimated to show value in excess of actual payments. "Non-use values" could also be estimated for those who simply place a value on preservation.

We'll discuss these values and the econometric techniques to estimate them in a few weeks.

This issue is really a messy one.

Do you allow public goods to be exploited in order to provide tax revenues that will be used to purchase .... more public goods?

Brad Coffey said...

What I'm not so sure about is why food resources aren't taken into a much higher value considering we as humans need food first over "precious" minerals that are used for aesthetics. Would they consider the impact on the jobs lost if the salmon stock is damaged?

Leilah Pandy said...

It would seem that the economic benefit of the salmon industry out weighs that of the mining industry in this particular river (250 to 200 mil). The ecological benefits of a clean river are also more important than the ‘benefits’ of mining as there are no foreseeable ecological benefits to dumping waste in a river. Even the social benefits (particularly job creation) of salmon indus prevail over that of mining; consider also the health hazards associated with mining. Based on these three points, the benefits of the salmon industry in this river outweigh the benefits of the mining indus. The cost (esp social and ecological cost) of the salmon industry is less than mining. Using this logic, making a decision should be easy.