What’s a River Worth?

Posted: 03/30/2011

To many ardent river lovers, thinking about economics is an almost painful thing, kind of like snagging your thumb on a treble hook or finding out that the permit application you filed five years ago to run the Grand Canyon was lost and never actually arrived.

But to Mike Fremont, ignoring economics has always been a mistake for river advocates.

Don’t get us wrong: Mike doesn’t have a pointy head and isn’t an ivory tower intellectual. Nor has he ever worked for a DC think tank.

Mike really likes rivers which he sees as “native habitat for canoe and kayak racers.” And a little pain has never been an obstacle that he took seriously.

At 89, Mike still races canoes three times per week near his home in Cincinnati. How does he do it? It helps a lot that Mike not only ran a marathon at the age of 88 — but also holds the world record for that age!

Few people in this country have deeper roots in the river protection community than Mike. He was a founder of Rivers Unlimited in 1972. He was there when American Rivers started the next year. And, of course, he was also there in 1988, when his friend, Phil Wallin, created River Network.

For at least the past quarter century, Mike’s real passion has been demonstrating that rivers are, quite literally, worth protecting. Starting in 1984, when he took part in an American Land Forum conference led by Kevin Coyle (later to become one of River Network’s early staff members), Mike has keenly understood that protecting rivers requires an ability to speak the “cost-benefit” and “contingent valuation” language of economists that resonates so well with local business leaders and government officials.

In fact, it’s no exaggeration to say that Mike is primarily responsible for the fact that the state of Ohio has become a national leader in river resource economics. He has worked closely with economists at Ohio State University for over a decade to build a solid base of research that is compelling not only to residents of the Buckeye state but to the nation as a whole.

Consider:

A study of a $2 million one-time investment in creating a bike path along the Little Miami River in Cincinnati found $6 million – each year – in economic benefits to the local community as recreational users invest in the gas, food and equipment to enjoy their day along the river. Because the Little Miami is also a National and State Wild and Scenic River and meets Clean Water Act standards so that river users feel safe, you can add in another $2 million from canoe and kayak rentals per year. What’s a river worth? In this case, it works out to something like just over $100,000 net per river mile per year.

River protection is also very good news for local tax rolls and real estate agents. In 1975, the New River in North Carolina was selected to be a National Wild and Scenic River. Property values at the time, along the river, were about $350 an acre. After designation as a national river, the real estate industry hyped the natural beauty of the river as ideal for vacation and retirement homes, and in a few years the land along the river went to $10,000 for a riverfront lot – perhaps 1/3 of an acre – or 90 times as much as it had been.

According to Mike: “The river hadn’t changed. Its image had. What more could any Chamber of Commerce ask? Any banker, developer or real estate agent instinctively knows.”

Mike quickly cautions that the economic valuation of rivers isn’t meant to trigger a land rush bonanza of new development. But the impact of increasing valuations of existing development on local tax rolls can be huge. And that means more resources for local schools, fire departments and other services.

Still, Mike wasn’t satisfied to simply be able to say that preserving a river makes good sense. He also wanted to show that restoring a river – often, a very costly project – still pencils out.

His next project was to focus on Mill Creek, which runs through a heavily industrialized section of Cincinnati, applying the same economic logic that made Wild & Scenic designation of the Little Miami now seem like such an obviously “duh” decision.

Mike galvanized support for another economic study that found that local officials could expect more than $100 million increase in property values, a $3.5 million annual increase in recreational use and an estimated increase in property tax revenues of $5.5 million. There is now a $1 million per year investment in restoring Mill Creek, including streambank restoration, reforestation, a bikeway, playing fields and more.

Still not satisfied, Mike took things to another level, asking “How much would it cost to change the image of the Ohio River?” And, if we changed the image to “clean river” then “what would happen to the river-related economy”?

Currently, many boaters and recreationists eschew the Ohio because of high levels of fecal coliform bacteria, opting for cleaner lakes in nearby Kentucky and Tennessee.

A “river-long” economic analysis proved too costly, but Mike rustled up enough funding to begin to answer the question with regard to the reach of the Ohio through and near Cincinnati, where a majority of the bacterial pollution is locally generated. The numbers still look favorable, even with major investments in new infrastructure. And, most importantly, the study showed that the public was willing to pay for cleaner water.

Most recently, Mike has taken a stab at estimating what all of this means economically for the nation as a whole. He’ll grant that not everyone fishes, boats, kayaks or swims. Or that everyone wants to live on a river (nor would we want them to!) But, suppose that just 6.5% of the nation’s river miles could ultimately qualify for national and/or state designation as a scenic river (right now, the percentage is more like 1%). There would be 0.065 x 3,500,000 miles of river or 227,500 miles of river nationally. Times $100,000 per mile, that is $22,750,000,000 dollars a year.

River Network is now building on the pioneering river resource economics work that might as well be called “Fremontics.” With support from EPA Region 5, we’re looking at the Clinton River watershed outside Detroit, Michigan, with an eye toward documenting how “green infrastructure” – the greenways, blueways and natural wetlands that Mike Fremont has espoused for decades – can create a powerful – and cost-effective – solution to the toxic stormwater runoff that pollutes so many of our cities. We’re hoping to do similar analyses in Louisville, Ky. and other communities throughout the U.S.

River Network President Todd Ambs added “I’ve known Mike for more than 20 years and he’s been a true visionary in this area. We all owe him a debt of gratitude.”