Does Ecosystem Valuation Contribute to Ecosystem Decision Making?: Evidence from Hydropower Licensing

A look at FERC's use of ecosystem valuation methods for licensing the operation of existing nonfederal hydropower dams.

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May 14, 2019


Kurt Stephenson and Leonard Shabman


Journal Article

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1 minute


Ecosystem valuation methods (EVM) have been developed by economists and offered as information that decision makers may find useful in making choices about ecosystem service levels. This paper examines the use of EVM by the U.S. Federal Energy Regulatory Commission (FERC) when licensing the operation of existing nonfederal hydropower dams. First, we report on the FERC decision to encourage the applicant to engage in a deliberative, decentralized negotiation process with a wide array of stakeholders that allows for, but does not require, EVM analysis as decision making information. Second, we report on 17 major relicensing cases where project operations that have significant impacts on aquatic restoration and recreational opportunities, and find that in no case did the participants request ecosystem valuation studies for comparison with monetary estimates of hydropower benefits. This reliance on a negotiation processes lieu of ecosystem valuation is consistent with the deliberative valuation processes supported by many ecological economists.


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