Sloppy economics

Oddly enough, the scenario modeled in the new report doesn’t bear much resemblance to the projects central to the Delta Plan and the Bay Delta Conservation Plan (BDCP). For example, it assumes a dual conveyance system averaging 4.9 million acre feet per year, about what exporters got between 1980 and 2000. But exporters have made it clear that they don’t want to pay for conveyance that doesn’t give them more than they were getting during that period.

PPIC also models habitat restoration that includes no loss for habitat conversion in San Joaquin County and excludes 65,000 acres of proposed tidal marsh. We’d be happy with that, but that isn’t what the BDCP is proposing. And elsewhere in its report, the PPIC models permanent flooding that puts the new Stockton Water Supply intake, gas facilities on McDonald and Twitchell islands, the deepwater ship channel, and water infrastructure and electricity transmission lines on Jersey Island all under water.   There’s no discussion of the economic impact of all this permanent flooding.

In his blog  California Economy, Dr. Jeffrey Michael of UOP’s Business Forecasting Center looks at the PPIC’s figures for farm employment and notes that they used a smaller multiplier for jobs in the Delta than they did for jobs in Kern County and Westlands. They seem to have overlooked the large percentage of farm proprietors in the five Delta Counties compared to, for example, Kern County. If you just use EDD data, which doesn’t include self-employed people, you’ll get a misleading picture of agricultural employment in the Delta.

Underestimating the value of agriculture allows the PPIC to be overly optimistic about the ability of recreation to offset ag losses. And Dr. Michael notes that the PPIC has overstated the importance to the Delta economy of recreation-related expenditures in the secondary zone.

“The notion advanced in the PPIC report that the legal Delta has a recreation oriented economy is false, it is wishful thinking and shameless pandering to the fictional narrative advanced by water export and habitat restorations interests.  If you combine the small real recreation sector with the mall and McDonalds selling to locals, it looks big.  The irony is that all that growth in so-called ‘recreation related’ jobs that impresses the PPIC experts is generated by those housing developments in the Delta that they hate.”

Other local analysts note that the PPIC has underestimated the value of Delta islands, their productivity, and the value of their crops. They’ve underestimated the value of Delta infrastructure. And they haven’t accounted for the impact of flooding an island adjacent to another island.

Related Posts