“Regulatory assurance” makes the case for through-Delta alternative!

At his blog, University of the Pacific economist Jeff Michael has just asked a really good question that the pro-conveyance Crown really needs to answer.

As is his wont, Michael crunches numbers. Most recently, his crunching on cost/benefit analysis of the various canal and tunnel alternatives has shifted to crunching on how “regulatory assurance” now factors into determining costs and benefits.

You can visit his blog and scroll through his posts to learn how the economics of the Big Infrastructure scenarios only pencil out through a “we are all in this together” argument that is actually a massive subsidy of Big Ag and Big Property.

Every politician in Sacramento knows they haven’t figured out how to sell the idea of getting taxpayers to vote for a taxpayer-paid $4 billion in Delta environmental remediation costs and shouldering much of the $13 (today’s low ball guesstimate) billion canal/tunnel costs necessitating the remediation - or at least not having come up with a better argument than because that’s the cost of doing business.

Quoting Michael:
In the BDCP most, if not all, of the environmental gains that could result in regulatory assurances for the overall projects are due to the habitat investments, not the tunnels which have uncertain environmental effects. The BDCP envisions $4 billion in habitat investments paid for by federal and state taxpayers.

I have always been fascinated with how environmental laws are manipulated, how they impact property rights, reflect our better angels and flusher times, etc.. Now, I am interested in this idea of regulatory assurance as the state-of-the-art in manipulation of these laws. But watch out, it might backfire….

As I read Michael’s explanation of Dr Sunding’s argument for factoring in regulatory assurance as an economic benefit, $4 billion dollars worth of publicly paid-for environmental remediation yields $11 billion dollar benefit to water contractors.

Again, quoting Michael:
In return for the habitat investment that advances recovery of the species as a whole, the HCP provides incidental take permits and some degree of “No Surprises” assurance that there will be no further regulatory or financial burdens for the regulated entities under the ESA. In the proposed BDCP, regulated entities are paying for water supply infrastructure and the public is paying for the habitat. Why would that be more deserving of regulatory assurance, than an HCP without the tunnels where the exporters themselves are paying for a comparable investment in habitat?

This is a truly excellent point. Michael concisely frames how the regulatory assurance argument deals with the objective conundrums of environmental law. Forget scientific conclusions - we have a legal framework to deal with uncertainty, and it’s called “regulatory assurance.”

Despite the hundreds of millions of dollars spent on environmental analysis, neither canals nor tunnels can be scientifically proven to yield positive environmental impacts. And that’s how regulatory uncertainty came to be created, or so it seems.

But the real brilliance of Michael’s post is what he asks at the end. To paraphrase:

Why, if canals and tunnels cannot be scientifically proven to yield positive environmental impacts, are we contemplating spending money on anything more than really big but way less expensive through-Delta conveyance (aka Big Levees) and in-Delta habitat restoration projects?

In previous posts I have speculated on how bypassing the Delta with a canal or tunnel could improve the plight of confused migrating fish. I have even speculated that a peripheral canal (but not a tunnel) could, if properly designed, inject high quality fresh water into intersecting rivers and sloughs as it makes its way around the eastern and southeastern edges of the Delta. But this is speculation based on common sense and not on science or legal precedent.

Yes, I understand that supply certainly is the other, arguably more important, half of the equation. So, canals and tunnels because of the inevitably rising sea? That’s why all of the Delta levees need to be Big, and Delta landowners need to give up the land to build these big setback levees, not to mention the habitat integrated into them. Because of the risk of earthquakes? Somehow magically tunnels and canals are invulnerable to them?

I doubt that taxpayers are willing to invest at least $20 billion, or three times as much as in a Fortress Delta, in a tunnel/canal that is no less vulnerable to an earthquake.