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<br />July 1985 -
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<br />TABLE. 3,. Economic 1'i'~Sibility of SCS On-Farm Salinity Control Units.
<br />
<br />. Western )ouma_l of AgriCultural Econom1c8
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<br />CD
<br />-..;t
<br />0)
<br />
<br />Non..(jiscOunted
<br />Total 6enefi_tsa.b
<br />
<br />Non-discounted
<br />Total Co~l..
<br />
<br />Benefill
<br />Present Vafue of Present Value of Cost
<br />Total eenefils" Total Co~t.. . Ratio
<br />
<br />Unit
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<br />Grand Valley $67,6.0.0,.0.0.0 $6.0,1.0.0,.0.0.0 $19,729,.0.0.0 $35,735,.0.0.0 .0_6
<br />Uinta Basin $39,52.0,.0.0.0 $91,7.0.0,.0.00. $11,144,.0.0.0 $52,569,.0.0.0 .0.2
<br />Virgin Valley $19,351,.0.0.0 .$4,9.0.0,.0.0.0 $8,537,.0.0.0 $4.404,.0.0.0 ':'[:3
<br />Maopa Valley $1.0,134,.0.0.0 $9,.0.0.0,.0.0.0 $4,336,.0.0.0 $7,842,.0.0.0 .0.6
<br />Lower Gunnison $174,2.03.,.0.0.0 $177,5.0.0,.0.0.0 $5.0,221,.0.0.0 $1.04,214,.0.0.0 .0.5
<br />Poco-San Rafael $52,.0.0.0,.0.0.0 $22,80.0,.0.0.0 $17,594,.0.0.0 $15,73.0,.0.0.0 1,10
<br />. Upper Virgin River. $5,2.0.0,.0.0.0 $2,6.0.0,.0.0.0 $2,201,00.0 $2,257,.0.0.0 1.0
<br />McElmo Creek $29,647,.00.0 $29,.0.0.0;.0.0.0 $1.0,877,.0.0.0 $21,671,.0.0.0 .0.5
<br />Manco~ $1.0,4.0.0,.0.0.0. $11,1.0.0,.0.0.0 $4,4.04,.0.0.0 $9,575..0.0.0 .0.5
<br />
<br />. $39,1.0.0 direct agricultural benefit~ + $218,7.0.0 municipal b9riefit~ - $257,8.0.0 per mg/liter or $26.per ton of
<br />salt removed_ Benefits are discounted _ for a .s_lx year hydraulic retention time at 8%.
<br />Ii ASSUm_BS a 20 year-life for on-farm improvements. , _ .
<br />c'Estimated total costs,1?ver- the Iif~ of the program, including C(U;structlon, tecrmical assistance. monitoring and
<br />evaluation. and B;Ktensive education costs. Source: U.S. Soil Conservation Service. 1983.
<br />d Discounted at 8%._ Assumed 1) all units begin construction in year 1, 2) aU costs are Incurred in proportion to .
<br />construction costs at -the beginning of each YB_ar, and 3) salinity reduction begins at end of year construction
<br />. C()sts are incurred and occurs in proportion: to costs jnc~rr~ that year.
<br />
<br />equivalent hou~ehold~ wa~ ~imilarly de-
<br />rived for the Central Arizona Project area.
<br />A 250.100hou~ehold e~timate for the
<br />Lower Main Stem region i~ bMed on ex-
<br />peeled growth in the region.
<br />Municipal benefit~.from ~alinity control
<br />can thu~ be ~timated for each year of the
<br />20 year planning horizon that repre~ent~
<br />the life of oncfarm ~alinity control mea-
<br />~ure~. Thi~ benefit ~tream i~ di~counted at
<br />8 percent intere~t. to obtain the pre~ent
<br />value of municipal damage~avoided from
<br />the reduction in salinity. Multiplying by
<br />the capital recovery factor for 20 year~
<br />and 8 percent convert~ the present value
<br />of the uneven ~tream of benefits to an e~-
<br />timate of average annual municipal ~alin-
<br />ity damage~ avoided of $308,300 per mg/
<br />liter, Then we di~count for the r.iver'~ hy-
<br />draulic retention time, yielding a mirnic-
<br />ipal ~alinity control benefit e~timate of
<br />$218,700 per mg/liter, or $22.05 per ton
<br />of ~alt removed, (Although We attempted-
<br />to u~e the ~ame a~~umption~a~ given in
<br />USBR (1980) our derived e~timate i~
<br />~omewhat .le~~ than u~ed in later US13R
<br />report~.)
<br />The~e estimate~ ignore any potential in-
<br />tangible benefit~, ~uch a~. health co~t~ or
<br />
<br />8
<br />
<br />the po~~ible ae~thetic di~utility of ~altier
<br />water. No authority, however, has ~ug-
<br />ge~ted thal the~e po~~ibilitie~ are of any
<br />~ignificance. The above damage e~timate~
<br />might aLSo prove low if water comerva-
<br />tion efforts lower average household water
<br />u~e,aIlowing the number of household~
<br />~erved by a fixed water ~upply to increase.
<br />However, new technologie~ maybe de-
<br />veloped that help ameliorate ~alinity
<br />damage~. Al~o, the model do~ not. allow
<br />replacement with the lowe~t co~t alterna-
<br />. tive, For example, copper water pipe~ or
<br />ca~t iron wa~tewater pipe~ would prove
<br />. le~~ co~tly than galvanized ~teel pipe over
<br />time (d'Arge and Eubank~,p, 264; An-
<br />dersonand Kleinman, p. 21).
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<br />Secondary (Indirect) Economic
<br />Impact~
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<br />An important difference between our
<br />e~timate~ of ~alinity damage and tho~e de-
<br />veloped by USBR i~ in the . treatment of
<br />~econdary economic impact~. The USBR
<br />(1983) incorporate~ ~econdary benefit~
<br />from agricultural damage abatement in
<br />the amount 0[$128,000 per mg/liter (de-
<br />veloped from regional impact multi-
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