| Abstract: | ABSTRACT: This paper provides a critical analysis of the Bureau of Reclamation's Auburn-Folsom South project in California. While this massive $1.5 billion project is temporarily halted for redesign for earthquake hazard, it is timely to examine its justification on economic grounds. The key finding is that several major benefit categories, irrigation and recreation, have been grossly overstated. In addition, the Bureau failed entirely to estimate the cost of use on the free-flowing American River, or a probability-weighted estimate of catastrophic loss. Revised estimates indicate that the project is not economically justified. In addition, the project has unattractive distributive effects. The implications of this case study for current revisions in U.S. water policy are explored. The Auburn study basically provides support for the U.S. Water Resource Council's draft manual of procedures for evaluating federal water resource projects. |
