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Analytical Methods and Approaches for Water Resources Project Planning 6 A New National Water Management Framework For much of U.S. history, water resources were viewed as a means for promoting economic expansion. Until the middle of the twentieth century, Corps of Engineers projects were generally single-purpose, often built primarily to manage flood risks or to enhance navigation. The Corps executed its work program with clear lines of authority from the U.S. Congress and with widespread citizen support. During the latter half of the twentieth century, the Corps began to implement multiple-purpose projects that aimed to provide a broader suite of benefits. This was a period during which preferences for the benefits sought from river, wetland, and coastal systems were broadening. Increasing interest in conservation, greater demand for water-based recreation, and the loss of some pristine riverine and coastal areas conspired to change the services sought from Corps projects. Water projects constructed in the middle of the century for hydroelectric power generation and flood control, for example, today may also be used to support flat-water recreation or to provide instream flows. Furthermore, restoring varying degrees of flow regimes and enhancing ecological benefits are likely to be prominent components of the Corps’ future work program. These shifts have had profound consequences for Corps project planning and management activities. For example, shifting environmental perceptions and preferences in the United States starting in the 1960s gave rise to federal legislation aimed at environmental protection. The National Environmental Policy Act (1969), Clean Water Act (1972), and Endangered Species Act (1973) are examples of federal environmental legislation with which the Corps must comply. In the ensuing decades, additional legislation, mandates, and tasks cited in congressional committee language have piled up. As a result, the Corps of Engineers today must comply with more than 200 pieces of federal legislation, some dating back to the early nineteenth century. This multilayered body of legislation was not created in accord with a master plan or strategy, and it has accreted on top of existing legislation that generally has
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Analytical Methods and Approaches for Water Resources Project Planning not been rescinded. It thus contains inconsistencies and does not provide guidance on resolving conflicts between mandates. Moreover, mandates to the Corps are often cast in broad, qualitative terms that do not offer specific guidance on the means of attaining desired ends or even describe when an objective has been met. At one time, this lack of specificity resulted in few problems because the Corps’ expertise was taken for granted, decisions were not widely scrutinized, Corps projects did not entail controversial trade-offs, and citizens generally agreed on national water management objectives. The contemporary setting, however, is vastly different, and involves scrutiny and criticism of national water management plans, a broad array of values (some of them mutually exclusive), increased willingness to litigate, and increasingly complex problems. A lack of clarity regarding the relative importance of legislation and guidance and a lack of specificity about desired objectives inhibit the agency’s ability to reach clear feasibility study recommendations. These shifts have had important consequences for Corps planning guidance. The federal Principles and Guidelines (P&G) document is geared to identify a project planning alternative that maximizes net economic benefits (the national economic development, or “NED,” alternative). In a contemporary political setting of broadened social values and lack of broad consensus about whether water resources should be used primarily to promote economic development or also to promote environmental or social benefits, a focus on traditional NED planning alternative may no longer be appropriate. Many U.S. citizens today perceive water resources as having value beyond an ability to provide for economic growth. Yet values associated with environmental preservation and aesthetics are not as easily monetized as traditional economic values associated with navigation and flood control and, thus, are not easily captured in the P&G analytical framework. Moreover, the Principles and Guidelines document was framed on the assumption that water resources planning decisions are primarily analytical in nature. In a “progressive era” setting (see Hays, 1959, for a discussion of late nineteenth-early twentieth century rational planning approaches) in which experts were entrusted with planning decisions and decisions were based on engineering principles, the P&G framework might have been appropriate. However, in a setting of conflicting values in which the need for stakeholder participation is broadly accepted, and where problems are complex and fraught with uncertainty, the P&G analytical framework is less able to effectively guide water resources management decisions.
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Analytical Methods and Approaches for Water Resources Project Planning CHANGES IN THE FEDERAL WATER POLICY FRAMEWORK Resolving Discrepancies in National Water Policy The Corps is hindered in its ability to reach clear planning and management decisions because of inconsistencies and contradictions that exist in the body of legislation, congressional committee language, and administration guidance (budget instructions, executive orders, and Office of Management and Budget guidelines) that constitute de facto national water policy. For example, the Corps of Engineers is obliged to follow the ESA and the CWA, but it is also authorized to maintain 9-foot navigation channels on river systems such as the Missouri and Mississippi. These mandates, however, are not always fully compatible. For example, a federally endangered species of fish may depend on some degree of streamflow variability at critical stages of its life cycle. The goal of protecting this species would thus, at times, be at odds with a goal of providing a reliable navigation channel. Such issues are further complicated by significant scientific uncertainties regarding the dynamics of large river-floodplain ecosystems or in determining the needs of a particular species. Without clear guidance on how to resolve such policy conflicts, the Corps often muddles through with a status quo plan and is then criticized for its inability to identify and implement new management decisions. A National Research Council committee that reviewed science and decision making on the Missouri River made a similar observation and recommended that “support of the U.S. Congress is ultimately needed to help establish acceptable goals for the use and management of the Missouri River system. Congress must also help identify the necessary authorities to do so” (NRC, 2002a). Similar examples can be found in conflicts among legislative instructions, agency regulations, and administration guidance concerning floodplain development, environmental enhancement programs, economic analyses, and other water issues. The lack of clarity and consistency within the body of federal water policy hinders the Corps’ ability to develop contemporary methods and models for use in its planning studies. Corps planners in the agency’s district level offices do not direct their efforts toward meeting a set of clear, internally-consistent national water policy goals, but rather focus on 1) adhering to steps prescribed in the Principles and Guidelines and related planning guidance, and 2) identifying a NED alternative that has a benefit-cost ratio greater than 1. Thus, rather than being provided with
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Analytical Methods and Approaches for Water Resources Project Planning clear ends and with a charge to develop means for achieving them, Corps planners are typically provided ambiguous ends, but with a set of relatively rigid steps to be executed. These steps—embodied in the P&G and in Corps planning guidance—stymie approaches or models that stray too far from the guidance and minimize the prospects for using the local knowledge and creativity of Corps planners to address water-related problems. Further complicating this setting is that the Corps often works in partnerships with local cosponsors who cover some portion of a planning study’s costs. The local cosponsor often has a clear idea of its desired planning alternative and has little interest in exploring alternatives or in supporting studies or projects that promote the national—as opposed to local—interest. With a lack of clear federal-level guidance or objectives, and a local sponsor that knows what it wants, that sponsor’s opinion may carry the day. Local stakeholder input should be included in management decisions, especially if local cosponsors are responsible for some portion of the study costs. However, the Corps of Engineers is a federal agency whose primary responsibility should be to uphold the public interest. Another example of a lack of clarity and consistency in legislation that guides the Corps is found in the 1983 P&G and in subsequent Water Resources Development Acts. The federal objective as defined by the 1983 Principles and Guidelines is “to contribute to national economic development, consistent with protecting the nation’s environment, pursuant to national environmental statutes, applicable executive orders, and other Federal planning requirements” (WRC, 1983). This objective, however, fails to require equivalent consideration of other factors as mandated by the Water Resources and Development Acts of 1986, 1990, and 1996 (codified in 33 U.S.C. section 2281). Section 2281 states in its entirety: Section 2281. Matters to be addressed in planning. Enhancing national economic development (including benefits to particular regions of the Nation not involving the transfer of economic activity to such regions from other regions), the quality of the total environment (including preservation and enhancement of the environment), the well-being of the people of the United States, the prevention of loss of life, and the preservation of cultural and historical values shall be addressed in the formulation and evaluation of water resources projects to be carried out by the Secretary, and the associated benefits and costs, both quantifiable and unquantifiable,
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Analytical Methods and Approaches for Water Resources Project Planning and information regarding potential loss of human life that may be associated with flooding and coastal storm events, shall be displayed in the benefits and costs of such projects. This directive mandates that all these factors be addressed along with national economic development in the Secretary’s evaluation of water resources projects, and that any cost-benefit analysis reflect consideration of these factors, whether quantifiable or unquantifiable. As noted, national water policy consists of a large number of legislative instructions and congressional and administration guidance. This amalgamation of policies and direction, however, does not always provide clear guidance or management objectives and often exhibits internal inconsistencies. To provide clearer direction to the Corps, the administration, and the Congress, in cooperation with the states, should reconcile inconsistencies within the existing, de facto, body of national water policy (Recommendation 1). Coordinating National Water Policy More than a dozen federal departments and independent agencies are responsible for some dimension of water resources management, and for the most part, they operate as independent activities without administration coordination or water policy oversight. Their charters come from the directives of the OMB, from legislative guidance, or from instructions of Congress. The principal water resources management agencies (the Corps, the Bureau of Reclamation, the Environmental Protection Agency, the Natural Resources Conservation Service, and the Tennessee Valley Authority) must coordinate and interact with resource and science-based agencies (the Fish and Wildlife Service, the Forest Service, the National Park Service, and the National Oceanic and Atmospheric Administration Fisheries), as well as specialized agencies with other water-related responsibilities (e.g., the Department of Housing and Urban Development, Department of Homeland Security [Federal Emergency Management Agency, Coast Guard], and the Small Business Administration). They must also work with the Executive Office of the President (the Council of Economic Advisers, the Council of Environmental Quality, and the OMB). Many issues are identified and resolved among or between agencies by senior career officials through memoranda of
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Analytical Methods and Approaches for Water Resources Project Planning agreement and similar instruments; however, more complicated issues—those that would require participation of political appointees at the assistant secretary level or higher—are frequently shunted aside because of the difficulty of bringing these individuals together. Even when meetings within multiple agencies do take place, the results are frequently bounded by the respective agencies’ legislative authorities, may not jibe with fiscal realities or administration policies, or may not be made known to other water-related agencies. For example, standards for levee design, cost-benefit analysis, floodplain occupancy, and postdisaster recovery support vary among agencies. Differences in methods and standards between agencies with overlapping or related responsibilities can impede effective program and policy execution (see NRC, 2000). The federal Water Resources Council (WRC) formerly provided a formal mechanism for promoting inter-agency coordination. Created as part of the 1965 federal Water Resources Planning Act, the Water Resources Council consisted of the Secretary of Agriculture, the Secretary of the Army, the Secretary of Commerce, the Secretary of Energy, the Secretary of Housing and Urban Development, the Secretary of the Interior, the Secretary of Transportation, and the Administrator of the Environmental Protection Agency (the latter was added after the EPA was established in 1970). Representing a culmination of many decades of interest in comprehensive river basin planning, the Water Resources Council was formed to report to the president and was charged with establishing principles, standards, and procedures for water resources and related land use planning (Kneese, 1996). The WRC established four different objectives for planning: (1) Regional Economic Development (RED), (2) Environmental Quality (EQ), (3) Other Social Effects (OSE), and (4) National Economic Development (NED). When the Water Resources Council issued the 1973 Principles and Standards, however, actual planning procedures were listed for only EQ and NED. In addition to the P&S, the Water Resources Council also issued assessments of the nation’s water resources, as well as a design for a state-level planning program. The council drew a great deal of criticism, however, and it was zero-funded in 1981. The Water Resources Council may technically continue to exist, but only on paper, as it has no staff and convenes no meetings. Whatever limitations existed within the Water Resources Council, it was the only venue for formal discussing and coordinating issues of import to the federal water resources management agencies. The functions lost with the demise of the Water Resources Council, such as its promotion of formal inter-agency coordination, have not been restored. As a
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Analytical Methods and Approaches for Water Resources Project Planning result, administration-level coordination meetings over the past two decades have been infrequent, and loose ends and conflicts abound. Plans to address water quality issues may not be closely aligned with water quantity-related issues or environmental activities. Interagency discussions are ad hoc. The development and application of new and innovative planning methods—even those that may have important inter-agency implications—are not formally coordinated between agencies (see, for example, NRC, 2000). This lack of formal, routine, and high-level interagency cooperation acts as a barrier to consistent policy applications, proactive and innovative planning approaches, and to the development and standardization of planning methods and techniques. Although the Water Resources Council was not without its limitations, the loss of the council has contributed to policy fragmentation and to inefficient and inconsistent applications of planning approaches and methods. A body should be specifically charged to coordinate water resources policies and activities among the administration, the Congress, the states, and federal water resources management agencies with water resources management responsibilities (Recommendation 2). Revising the Principles and Guidelines Policy Dimensions—Principles The Corps’ planning procedures are governed by the federal Economic and Environmental Principles and Guidelines for Water and Related Land Resources Implementation Studies (the P&G). Written in 1983 by the federal Water Resources Council (WRC), the P&G also guides water resources project planning of three other federal agencies: the Bureau of Reclamation, the Natural Resources Conservation Service, and the Tennessee Valley Authority. The “principles” within the P&G identify the objective of federal water resources activities as: “To contribute to national economic development consistent with protecting the Nation’s environment, pursuant to national environmental statutes, applicable executive orders, and other Federal planning requirements” (WRC, 1983). This national economic development objective represents the views of the current and previous administrations, and not necessarily those of the Congress. The emphasis on economic development discounts the value of environmental and social costs and benefits. Moreover, the
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Analytical Methods and Approaches for Water Resources Project Planning P&G outlines a process that causes costs and benefits to be represented only by what can be monetized, which does not allow for full consideration of a project’s nonmonetized aspects. The P&G therefore directs the Corps (and other agencies) to develop projects that do not reflect full pricing of the costs and benefits of federal activities. This is especially problematic in that a) nearly every Corps of Engineers prospective or existing water project has important (and difficult-to-quantify) environmental dimensions, and b) that an increasing portion of Corps projects are designed to enhance environmental benefits. This federal objective and the procedures outlined in Principles and Guidelines for the execution of project planning do not incorporate either policies and statutory objectives that recognize social needs and preferences or planning approaches and methods that have evolved since 1983. This results in conflicts among guidance found in the P&G, statutes enacted since 1983, and contemporary approaches to project evaluation. The Corps is thus torn between administration direction to conform with the P&G, and administration or congressional guidance to support other federal objectives and the polices and procedures found in various legislation and in other administration and congressional documents. Moreover, other federal agencies conducting important water planning and management activities (e.g., the Environmental Protection Agency and the Federal Emergency Management Agency) are not required to follow the same project justification procedures, despite the fact that their impacts on water resources may in some instances exceed those of the Corps. Analytical Dimensions—Guidelines The guidelines in the P&G are used to identify the national economic development alternative. Alternatives to the NED may be formulated, but they are not required. In addition, all alternatives are subjected to a benefit-cost test. The guidelines prescribe steps to be followed in the planning of a variety of water-related projects, including municipal and water supply, agriculture, urban flood damage, hydropower, inland navigation, transportation (deep-draft navigation), recreation, and commercial fishing. There is a strong reliance within the P&G planning guidelines on forecasts and future estimates. Figure 6-1, for example, shows the steps prescribed in the P&G for planning an urban flood damage reduction project. This figure illustrates that the planning process and final deci-
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Analytical Methods and Approaches for Water Resources Project Planning FIGURE 6-1 Steps in an urban flood damage reduction study, according to the P&G. SOURCE: WRC (1983).
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Analytical Methods and Approaches for Water Resources Project Planning sion depend on forecasts and future estimates of activities in the affected area, land use, flood-related costs, and future flood damages. Within the guidelines, 10 steps are prescribed for evaluating urban flood damage projects, many of which call for the calculation of values for multiple variables. Step 7 (WRC, 1983, p. 2.4.11), for example, calls for the computation of hydrologic changes, economic changes, projection of physical damages, physical units, value per physical unit (existing, future, translation to flood damages, limit), and damage susceptibility (projection of income losses and projection of emergency costs). Not only does the calculation of some of these variables—including many future and thereby unknown variables—require a degree of analytical sophistication, but their inclusion and quantification as integral planning steps are based on the premise that they can be predicted with a reasonable degree of precision. This example not only illustrates the degree to which the P&G relies upon precise and accurate forecasts of future variables, but also the great level of detail contained in the guidelines, which amount to more than 100 pages of instruction. In addition, many concepts and approaches in the P&G were derived from its predecessor Principles and Standards document (WRC, 1972), which was based on paradigms that dated back to the 1950s and 1960s. Although some of the conceptual foundations within the P&G may yet have relevance, the document does not reflect analytical advances (e.g., monetization techniques, risk and uncertainty analysis, changing views of appropriate benefit-cost applications) and shifts in planning paradigms (e.g., adaptive management, stakeholder collaboration, independent review) that have occurred since 1983. Another key consideration in contemporary water resources planning not adequately reflected in the P&G is stakeholder participation. In today’s planning environment, interest groups from all corners carefully scrutinize all aspects of Corps planning studies. To its credit, the Corps generally promotes strong public involvement in its studies, and the Corps routinely holds public meetings at various stages of its planning studies, especially for the agency’s more visible and controversial studies. Informal discussions with Corps planners and analysts suggest that staff members appreciate the value of early public participation and encourage it. The P&G analytical framework, however, provides no avenue for the input or participation of stakeholder groups. The P&G contains a short paragraph on “General Public Participation” and appropriately recommends participation “throughout the planning process” of national, regional, local, and tribal groups. The analytical procedures prescribed in the P&G, however, do not allow for qualitative considera-
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Analytical Methods and Approaches for Water Resources Project Planning tions to enter into the planning calculus. The P&G thus puts the Corps in a position of working in a setting in which stakeholder groups request input into planning decisions (which the Corps appreciates and responds to), but of having to follow a step-by-step framework that does not allow for the consideration of nonquantified variables. The P&G represented state-of-the-art thinking in economics and planning when it was written and some of the concepts and paradigms that underpin the P&G are relevant today. However, it has been over 20 years since the P&G was updated and revised. The P&G planning process is part of a federal water resources decision making environment in which the product has become adherence to process, rather than sound projects and operations plans that serve contemporary needs. The Principles and Guidelines document should be revised to better reflect contemporary management paradigms; analytical methods; legislative directives; and social, economic, and political realities. The new planning guidance should apply to water resources implementation studies and similar evaluations carried out by all federal agencies. A revised version of the P&G document should be periodically and formally reviewed and updated (Recommendation 3). No significant action has yet taken place within the Administration in response to this recommendation that has been voiced by many groups. Therefore, even if the Administration should choose to not revise the P&G, the Corps should draft a revision to its Planning Guidance Notebook that is consistent with this report’s recommendations, and propose this revision to the Administration (Recommendation 4).
Representative terms from entire chapter: