Diversion Of Great Lakes Water. Part 2, Economic Impacts

An economic model is developed to assess the monetary impacts of potential large-scale Great Lakes water diversions on the shipping and hydropower industries in the region. The model indicates that a moderate-sized (10 thousand cubic feet per second [tcfs]) diversion would cost the industries $70-90 million annually, depending on the lake used as the source. A large diversion (30 tcfs) would cost them $250 million annually. In each case, the added costs to the Great Lakes hydropower industry are roughly 10 times those to the shipping industry. Although the added costs would be significant to these industries, they probably would be minor to the regional economy as a whole. However, neither the water-transmission costs of diversions nor the economic effects on environmental attributes such as recreation, wetlands, and wildlife are considered in the model.