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10 Estimating Economic Impacts of Salinity... r..;) a> 00l {D composition, except in industrial water use and reclaimed wastewater if such data are available; [Note: The authors have not separated municipal water use damages according to ion composition, but have dis- cussed the complexity of corrosion which is a major cause of such damages and which is significantly influenced by the ion composition of the salinity.] . The study will retain a basinwide perspec- tive of control and water use areas in deter- mining benefits or avoided damages from salinity control measures. Background of the Study As discussed in chapter 2 of the report, (Salinity Control Programs and Legislation), the federal government in cooperation with the Colorado River Basin States is engaged in a program of study and construction of salinity control measures in the Colorado River Basin. Although the current law establishes cost- effectiveness as the criterion for selection of salinity control projects rather than direct cost- benefit analysis, there remain public policy ques- tions concerning the economic impacts of the salinity control program. It is important that the public, the Congress and the Administration have the best information available in determin- ing tbe program's economic benefits and relative costs to weigh these benefits against their costs. The salinity control program's economic impacts have been investigated in some depth only once, in a study begun by the Bureau of Reclamation in 1973, extended by researchers in the Water Resources Research Institutes of Arizona, California, Colorado, and Utah in sub- sequent years, and published in 1978 as Jay C. Andersen and Alan P. Kleinman, et aI., Sqlinity Management Options for the Colorado River. A summary of this report appeared in 1980 as Colorado River Salinity: Economic Impacts 011 Agricultural, Municipal and Industrial Users by Kleinman and Brown. In these earlier reports, the data on economic damages from salinity were expressed in $/mgiL for agricultural damages and in $/mgiL!household for municipal damages. These measurements are useful statistical measures. However, these damage estimates have several shortcomings: . They are based on 1976 data which have been updated only through general price indexing using the GNP Implicit Price Deflator. This index does not reflect rela- tive changes in the cost of water treatment chemicals, household appliances, and crops since 1976 nor does it reflect changes in treatment technology nor in consumer behavior, e.g., increased use of bottled water. . No study of industrial damages from salinity was made because of the difficulty of obtaining the masses of data considered necessary; although the task of obtaining data for a detailed industrial damage study is indeed Herculean, the absence of even an approximate estimate of such damages is a serious deficiency in a region of con~ tinuing industrial development. . As industrial and residential development continues, the use of water in the Basin is shifting from agriculture to M&I; further- more, the relative economic signilicance of agriculture has dropped due to weak crop prices whereas the significance of salinity damages from water in M&I use is growing. The economic impacts of these shifts have not been reflected in the index- ing. . The projections of future salinity levels in the Colorado River used in the research reported by Kleinman and Brown to forecast damages2 now appear too high. This is partly because economic develop- ment of the Basin is not occurring as . rapidly as was assumed in 1976, resulting from such unexpected occurrences as the sharp turndown in oil shale and energy 2Kleinman and Brown calculated damages over the range or 800 to 1400 mg/L but assumed that the relevant range was 875 mgIL (the then present limit) to 1225 mg/L (the Bureau of ~ec!amation's fomte~ ~stimate of salinity at f~1I ~evelopmcnt with no mitigation measures employed. The Bureau's 1987 projections of future sahRlty based on CRSS projections arc shown in Figures 3, 4, and 5, page 19.