Tuesday, September 3, 2013

Comparing Benefit Cost Estimates of the Tunnels

Last week, the State Water Contractors' sent out an odd news release and "fact sheet" comparing estimates of the benefits and costs of Delta tunnels that have been prepared by me and David Sunding.  I guess I have got their attention.  I'm surprised that the fact sheet didn't mention that Dr. Sunding is also older, taller, thinner, and drives a cooler car than I do.  That would have been just as relevant to benefit-cost analysis as many of their comparisons.

What you will not find in the SWC releases are any numbers from the reports except the "bottom line."  Thus, I pasted a handy table below that actually compares the benefits and costs.  As you can see (click here if image is too fuzzy), almost all of the difference is in the top line, export water supply.

As discussed elsewhere on this blog and other venues, the difference in export water supply benefits is driven entirely by the BDCP economic studies' assumption about no-tunnel water supply that is completely at odds with the water supply estimates in the BDCP's EIR, and is much lower than any regulation proposed or considered by any regulatory agency.  Dr. Sunding got over $10 billion in water supply benefits and over 1 million acre feet of additional water by assuming a massive tightening of regulations will cut water exports another 25% by 2025 if the tunnels are not built.  Then, he conveniently omitted the environmental, fishing and in-Delta benefits that would occur in the unlikely case of such a dramatic reduction in water exports.

In contrast, I was much less creative and simply used the BDCP EIR estimates of water supply without the tunnels, and also used the EIR to estimate the environmental benefits generated by the tunnels themselves (nil).

If you would like more elaboration on the numbers in this table, the differences between the reports, and some comments on SWC's fact sheet, click through to this document.  (Warning! The document is only 6 pages, so it is obviously a piece of amateur garbage that does not meet BDCP consulting standards for depth.)

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