Economics of the Delta Conveyance Project Insights
This presentation by Dr. Jeffrey Michael delves into the economic aspects of the Delta Conveyance Project, discussing job creation, cost-effectiveness, environmental impacts, and the implications for the state and Delta economy in both short and long terms. The analysis underscores the importance of considering long-term returns on investments and alternatives that may yield more local and sustainable benefits.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
June 24, 2022 June 24, 2022 Economics of the Delta Conveyance Project Dr. Jeffrey Michael Professor of Public Policy Director of Public Policy Programs
Outline 01 Jobs in Context 03 Statewide Economy Cost-Effectiveness Impact of Environmental Commitments Opportunity Costs Equity 02 Delta Economy Short-run Impacts Long-run Impacts
Jobs In Context: All public works spending creates jobs. Some projects create more jobs per $ than others. Temporary jobs filled by non-locals. Should Focus on Long-Run Return on Investments.
Billions On Tunnel Boring Machines Does Not Create Many Local Jobs Per $ of Spending Previous analyses have shown that alternatives such as water conservation projects create two times the jobs per $ spent than Delta tunnels.
Delta Economy
Delta Economy: Short-run Impacts Delta Economy Is Increasingly Dependent on Logistics and Commuters And thus increasingly dependent on inter-regional transportation routes. Major Transportation Impacts Will Cause Harm To Critical Industries. Massive # of truck trips will slow traffic, reduce competitiveness of logistics sector, reduce access to jobs, and degrade critical infrastructure. Disruption to agricultural operations. Harm to recreational operations. Jobs Benefit: Many will be temporary and non-local. Alternatives would likely create more local and on-going jobs.
Delta Economy: Long-Run Impacts No Long-Term Benefits Risks of Significant Long-Term Harms Water Quality: Agricultural, Recreational, Health and Municipal Impacts Flood Control: Risk of Lower Investment
Statewide Economy
Not cost-effective University of the Pacific Statewide Analysis of WaterFix (twin tunnels) found costs were 4x benefits. Accurately predicted agricultural water agencies would drop out. Previous State Analysis of Single-Tunnel Alternative Found It Failed Benefit-Cost Test, Less Cost-Effective Than Twin Tunnels 2013 Secretary of Natural Resources letter dismisses one-tunnel option citing state economic analysis that showed one-tunnel alternative had a benefit-cost <1 . 2018 State analysis of staged one-tunnel approach found it less cost- effective than two tunnels, and negative for agricultural water users.
Costs Are Rising Rapidly, And Water Demand Is Declining 2017 DWR Estimate For One-Tunnel Alternative: $11.7 billion 2020 DWR Estimate: $15.9 billion State Construction Cost Index Has Soared 30% since 2020! Suggests current cost of Delta Conveyance is > $20 billion. Population Growth Is Declining and Projected To Be Flat Rising costs spread over fewer ratepayers means: Much larger impacts on water bills. Less total financial capacity for water infrastructure tunnel is more likely to displace alternative investments.
Conclusion 01 Jobs Spending on tunnel boring machines creates far fewer jobs than alternatives. 03 Statewide Economy One tunnel Is Even Less Cost- Effective. Costs Rising Fast. Crowds Out Funding for Better Investments Equity: Financing Will Likely Result In Redistributing Water from Valley To Coastal Cities. Environmental Promises Will Conflict With Financial Commitments. 02 Delta Economy Short-run Impacts Benefits: Construction jobs Harm: Multiple problems for existing local industries, housing, and commuters. Long-run Impacts Benefits: None Harm: Multiple problems for existing local industries, housing, and commuters.
