Dam Removal: A Taxonomy with Implications for Economic Analysis

Abstract

Casual observers of dam removal activity in the United States are most likely familiar with the three most widely publicized removal or proposed removal projects—the Edwards Dam on the Kennebec River in Maine (removed), the Elwah and Glines Canyon Dams on the Elwah River in Washington (planned) and the proposed removal or breaching of dams on the lower Snake River along the Oregon-Idaho border. While these removal projects involve medium to large scale dams, most of the actual removal activity involves small, run-of-river dams whose economic usefulness has long past (American Rivers et al. 1999). Thus, dam removal involves projects ranging from those with small removal costs and clear, local benefits to high removal costs and uncertain benefits ranging over an entire river basin. In 2004, the Environment and Water Resources Institute of the American Society of Civil Engineers initiated a series of workshops aimed at the civil engineering community, to address the major issues associated with dam removal (Environmental and Water Resources Institute 2004). As the speaker on the economic aspects of dam removal at one workshop in this series, it became apparent that clarifying dam removal’s economic issues would make an important contribution to the dialogue among economists, civil engineers, biologists, environmentalists, state officials, and others involved in the dam removal process. This paper proposes a taxonomy of dam removal projects—from the simple to the complex. The dimensions of this dam removal taxonomy extend over a range from: (1) small to large dams; (2) single purpose to multipurpose projects; (3) positive to negative impacts of sediment movement; (4) dam is a liability rather than an asset; (5) removal benefits are certain rather than uncertain; (6) removal generates market benefits versus non-market benefits; (7) removal generates positive versus negative externalities; (8) the scope is local versus national; and (9) removal benefits occur sooner rather than later. Dams at one end these scales are easy to evaluate while those at the other are far more complex. By explicitly identifying the dimensions that complicate dam removal decisions, this paper aims to clarify how these project parameters affect economists’ estimates of net benefits and thus improve understanding of economic analysis among the many disciplines involved in such projects.