IDEAS home Printed from https://ideas.repec.org/a/uwp/landec/v86y2010iii1p444-466.html
   My bibliography  Save this article

Balancing Environmental Protection and Energy Production in the Federal Hydropower Licensing Process

Author

Abstract

The U.S. Federal Energy Regulatory Commission (FERC) must balance environmental protection of riverine resources with the nation’s growing demand for power production every time it issues a hydroelectric license. This paper models the bureaucratic agency’s decision-making process in issuing these licenses. Data on nearly 500 hydropower licenses issued from 1983 to 2005 are utilized. It is discovered that legislative and institutional constraints are, by far, the largest influences on FERC’s regulatory decisions, implying that if the current allocation of surface water in the United States is considered inefficient, the most effective way to alter this allocation is by passing new legislation, or by implementing institutional reform at FERC.

Suggested Citation

  • Lea Kosnik, 2010. "Balancing Environmental Protection and Energy Production in the Federal Hydropower Licensing Process," Land Economics, University of Wisconsin Press, vol. 86(3).
    • Handle: RePEc:uwp:landec:v:86:y:2010:iii:1:p444-466
    as

    Download full text from publisher

    File URL: http://le.uwpress.org/cgi/reprint/86/3/444
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Matthew J. Kotchen & Michael R. Moore & Frank Lupi & Edward S. Rutherford, 2006. "Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan," Land Economics, University of Wisconsin Press, vol. 82(3), pages 384-403.
    2. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 239-264, October.
    3. Crone, Lisa & Tschirhart, John, 1998. "Separating economic from political influences on government decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 35(4), pages 405-425, May.
    4. Eric Helland, 1999. "The Waiver Pork Barrel: Committee Membership And The Approval Time Of Medicaid Waivers," Contemporary Economic Policy, Western Economic Association International, vol. 17(3), pages 401-411, July.
    5. Sigman, Hilary, 2001. "The Pace of Progress at Superfund Sites: Policy Goals and Interest Group Influence," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 315-344, April.
    6. Lea-Rachel D. Kosnik, 2006. "Sources of Bureaucratic Delay: A Case Study of FERC Dam Relicensing," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(1), pages 258-288, April.
    7. Christopher R. Knittel, 2006. "The Adoption Of State Electricity Regulation: The Role Of Interest Groups," Journal of Industrial Economics, Wiley Blackwell, vol. 54(2), pages 201-222, June.
    8. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    9. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 243-277, Fall.
    10. Brian K. Edwards & Silvio J. Flaim & Richard E. Howitt, 1999. "Optimal Provision of Hydroelectric Power under Environmental and Regulatory Constraints," Land Economics, University of Wisconsin Press, vol. 75(2), pages 267-283.
    11. Anderson, Keith B, 1993. "Agency Discretion or Statutory Direction: Decision Making at the U.S. International Trade Commission," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 915-935, October.
    12. Weingast, Barry R & Moran, Mark J, 1983. "Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 765-800, October.
    13. Toke Skovsgaard Aidt, 2002. "Strategic Political Participation and Redistribution," Economics and Politics, Wiley Blackwell, vol. 14(1), pages 19-40.
    14. David Dranove & David Meltzer, 1994. "Do Important Drugs Reach the Market Sooner?," RAND Journal of Economics, The RAND Corporation, vol. 25(3), pages 402-423, Autumn.
    15. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    16. Ando, Amy Whritenour, 1999. "Waiting to Be Protected under the Endangered Species Act: The Political Economy of Regulatory Delay," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 29-60, April.
    17. Nowell, Clifford & Tschirhart, John, 1990. "The Public Utility Regulatory Policy Act and Regulatory Behavior," Journal of Regulatory Economics, Springer, vol. 2(1), pages 21-36, March.
    18. Gilligan, Thomas W & Marshall, William J & Weingast, Barry R, 1989. "Regulation and the Theory of Legislative Choice: The Interstate Commerce Act of 1887," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 35-61, April.
    19. Olson, Mary K, 1995. "Regulatory Agency Discretion among Competing Industries: Inside the FDA," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(2), pages 379-405, October.
    20. Kris James Mitchener, 2007. "Are Prudential Supervision and Regulation Pillars of Financial Stability? Evidence from the Great Depression," Journal of Law and Economics, University of Chicago Press, vol. 50(2), pages 273-302.
    21. Brian K. Edwards, 2003. "The Economics of Hydroelectric Power," Books, Edward Elgar Publishing, number 2244.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ignacio Guisández & Juan I. Pérez-Díaz & José R. Wilhelmi, 2016. "The Influence of Environmental Constraints on the Water Value," Energies, MDPI, vol. 9(6), pages 1-21, June.
    2. Yang, Jie & Huang, Yijing & Takeuchi, Kenji, 2022. "Does drought increase carbon emissions? Evidence from Southwestern China," Ecological Economics, Elsevier, vol. 201(C).
    3. Guisández, Ignacio & Pérez-Díaz, Juan I. & Wilhelmi, José R., 2016. "Approximate formulae for the assessment of the long-term economic impact of environmental constraints on hydropeaking," Energy, Elsevier, vol. 112(C), pages 629-641.
    4. Tyler A. Scott & Nicola Ulibarri & Ryan P. Scott, 2020. "Stakeholder involvement in collaborative regulatory processes: Using automated coding to track attendance and actions," Regulation & Governance, John Wiley & Sons, vol. 14(2), pages 219-237, April.
    5. Schäffer, Linn Emelie & Helseth, Arild & Korpås, Magnus, 2022. "A stochastic dynamic programming model for hydropower scheduling with state-dependent maximum discharge constraints," Renewable Energy, Elsevier, vol. 194(C), pages 571-581.
    6. Juan I. Pérez-Díaz & José I. Sarasúa, 2015. "Failures during Load-Frequency Control Maneuvers in an Upgraded Hydropower Plant: Causes, Identification of Causes and Solution Proposals," Energies, MDPI, vol. 8(10), pages 1-21, September.
    7. Borisova, Tatiana & Bi, Xiang & Hodges, Alan & Holland, Stephen, 2017. "Is the tide is changing? Assessing costs and benefits of dam removal and river restoration: a case study in Florida," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252833, Southern Agricultural Economics Association.
    8. Pérez-Díaz, Juan I. & Wilhelmi, José R., 2010. "Assessment of the economic impact of environmental constraints on short-term hydropower plant operation," Energy Policy, Elsevier, vol. 38(12), pages 7960-7970, December.
    9. Megan Hansen & Randy T. Simmons & Ryan M. Yonk, 2016. "The Regulatory Noose: Logan City’s Adventures in Micro-Hydropower," Energies, MDPI, vol. 9(7), pages 1-16, June.
    10. Kosnik, Lea-Rachel, 2014. "Determinants of contract completeness: An environmental regulatory application," International Review of Law and Economics, Elsevier, vol. 37(C), pages 198-208.
    11. Kosnik, Lea, 2008. "Consolidation and ownership trends of nonfederal hydropower generating assets, 1980-2003," Energy Economics, Elsevier, vol. 30(3), pages 715-731, May.
    12. Stephenson, Kurt & Shabman, Leonard, 2019. "Does ecosystem valuation contribute to ecosystem decision making?: Evidence from hydropower licensing," Ecological Economics, Elsevier, vol. 163(C), pages 1-8.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ando, Amy, 1998. "Delay on the Path to the Endangered Species List: Do Costs and Benefits Matter," RFF Working Paper Series dp-97-43-rev, Resources for the Future.
    2. P. Hägg, 1997. "Theories on the Economics of Regulation: A Survey of the Literature from a European Perspective," European Journal of Law and Economics, Springer, vol. 4(4), pages 337-370, December.
    3. Mary K. Olson, 1997. "Firm Characteristics and the Speed of FDA Approval," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 377-401, June.
    4. Mary K. Olson, 2000. "Regulatory Reform and Bureaucratic Responsiveness to Firms: the Impact of User Fees in the FDA," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 363-395, June.
    5. Hansen, Wendy L & Prusa, Thomas J, 1997. "The Economics and Politics of Trade Policy: An Empirical Analysis of ITC Decision Making," Review of International Economics, Wiley Blackwell, vol. 5(2), pages 230-245, May.
    6. Moszoro, Marian W. & Spiller, Pablo T., 2014. "Third-Party Opportunism and the Theory of Public Contracts: Operationalization and Applications," MPRA Paper 101592, University Library of Munich, Germany.
    7. repec:zbw:bofitp:2018_007 is not listed on IDEAS
    8. Sechindra Vallury & Bryan Leonard, 2022. "Canals, climate, and corruption: The provisioning of public infrastructure under uncertainty," Economics and Politics, Wiley Blackwell, vol. 34(1), pages 221-252, March.
    9. David Savitski, 2001. "Price Effects of Across-State Regulation of U.S. Electric Utilities," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(3), pages 337-350, May.
    10. Moser, Peter, 1999. "The impact of legislative institutions on public policy: a survey," European Journal of Political Economy, Elsevier, vol. 15(1), pages 1-33, March.
    11. Min-Seok Pang, 2017. "Politics and Information Technology Investments in the U.S. Federal Government in 2003–2016," Information Systems Research, INFORMS, vol. 28(1), pages 33-45, March.
    12. Israel Marques, 2014. "Firms And Social Policy In The Post-Communist Bloc: Evidence From Russia," HSE Working papers WP BRP 87/EC/2014, National Research University Higher School of Economics.
    13. Niu, Shilei & Insley, Margaret, 2013. "On the economics of ramping rate restrictions at hydro power plants: Balancing profitability and environmental costs," Energy Economics, Elsevier, vol. 39(C), pages 39-52.
    14. Estache, Antonio & Wren-Lewis, Liam, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," CEPR Discussion Papers 8082, C.E.P.R. Discussion Papers.
    15. Ando, Amy Whritenour, 2001. "Economies of Scope in Endangered-Species Protection: Evidence from Interest-Group Behavior," Journal of Environmental Economics and Management, Elsevier, vol. 41(3), pages 312-332, May.
    16. Rayamajhee, Veeshan & Joshi, Aakrit, 2018. "Economic trade-offs between hydroelectricity production and environmental externalities: A case for local externality mitigation fund," Renewable Energy, Elsevier, vol. 129(PA), pages 237-244.
    17. Marques II, Israel, 2018. "Firms and social policy preferences under weak institutions : Evidence from Russia," BOFIT Discussion Papers 7/2018, Bank of Finland, Institute for Economies in Transition.
    18. Rui J. P. De Figueiredo & Geoff Edwards, 2007. "Does Private Money Buy Public Policy? Campaign Contributions and Regulatory Outcomes in Telecommunications," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 547-576, September.
    19. Mariano Tommasi & Pablo T. Spiller, 2004. "The Institutions of Regulation," Working Papers 67, Universidad de San Andres, Departamento de Economia, revised Mar 2004.
    20. Antonio Estache & Liam Wren-Lewis, 2011. "Anti-Corruption Policy in Theories of Sector Regulation," Chapters, in: Susan Rose-Ackerman & Tina Søreide (ed.), International Handbook on the Economics of Corruption, Volume Two, chapter 9, Edward Elgar Publishing.
    21. Marques II, Israel, 2018. "Firms and social policy preferences under weak institutions: Evidence from Russia," BOFIT Discussion Papers 7/2018, Bank of Finland Institute for Emerging Economies (BOFIT).

    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:86:y:2010:iii:1:p444-466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://le.uwpress.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.