Economic Implications of Winter-run Chinook Salmon Conservation through Water Management in the Southern Delta

Recent legal restrictions on water exports in the Southern Delta to protect listed fish populations have brought public attention to the trade-off relationship between fish conservation and agricultural economy. The restrictions may result in losses of agricultural returns in the Central Valley. This paper aims to examine the economic costs of conserving the endangered Winter-run Chinook salmon for two water year assumptions: one without environmental correlations and the other with the environmental correlations. The combination of a modified statewide agricultural production model and a multistage Winter-run Chinook salmon model allows me to assess the economic costs per age 3 and 4 adult for two cases. The estimated costs range from $1,304 to $114,966 for the first case and from $864 to $721,120 for the second case. They generally increase at an increasing rate as the pumping cuts back from 10% to 100%. The consideration of environmental correlations does not change the order of cost estimates: critical, dry, wet, above normal, and below normal. The results provide policy-makers with economic data on the tradeoffs in water management for the Southern Delta. One important factor in determining the agricultural losses is a climatic condition and the corresponding dependency of the farms on water exports.