160 • Wetlands: Their Use and Regulation 



ject to such costs beyond the opportunity costs as- 

 sociated with normal processing. In fiscal year 1981 , 

 291 permits were denied to section 404 and 10/404 

 projects, about 2.7 percent of total permits proc- 

 essed. About 14 percent, or 1,545 permits, were 

 withdrawn. As stated in the IWR report, not all 

 withdrawals can be attributed to the regulatory pro- 

 gram. Other factors, such as changed economic 

 conditions, can cause applicants to change their 

 plans. However, the majority of withdrawals prob- 

 ably stem from difficulties encountered in the course 

 of agency review of permit applications. As dis- 

 cussed earlier, roughly one-third of issued permits 

 are modified substantially; about the same percent- 

 age are delayed. Some overlap probably exists in 

 these last two categories. It also is likely that of per- 

 mits not issued, some proportion were in process- 

 ing for over 120 days; however, no estimate is avail- 

 able of what this figure might be. At minimum, 

 the percentage of delays/modifications, with- 

 drawals, and denials can be added together, result- 

 ing in a figure of at least half of all permits that 

 experience opportunity costs beyond those associ- 

 ated with routine processing. 



A large part of the problem in estimating oppor- 

 tunity costs is the difficulty of getting objective in- 

 formation. Investments are not necessarily idle, 

 even if "sunk" in a project. For example, ma- 

 chinery may be contracted out to other firms. In 

 some industries, some periods of the year normal- 

 ly are slack, and permit delays cannot justly be 

 regarded as the source of idle labor and machinery. 

 However, few 404 program critics volunteer such 

 information. To give a more common example of 



the difficulty in making estimates, modifications of 

 permits often require changing the timing of a 

 planned activity so that it will have less impact on 

 various wetland species of animals (e.g., not per- 

 forming the activity during spawning season). 

 Delays also will affect project timing. The cost of 

 the impact depends on the extent to which the ap- 

 plicant already has committed resources to the time 

 originally asked for in the permit. This will only 

 be known to the permittee. According to Corps per- 

 sonnel, consultations before permits are submitted 

 will make it known to prospective applicants what 

 generally can be expected; hence, to commit large 

 amounts of time and money in advance to a proj- 

 ect before submitting an application is not prudent, 

 and delay costs, if they occur, thus are not entirely 

 due to Corps actions. 



Few estimates of opportunity costs were given 

 by associations. According to FI, the value of 33.5 

 million tons of phosphate rock underlying 2,862 

 acres not approved for mining in permit applica- 

 tions from 1975 to the fall of 1982 totaled between 

 $804 million and $838 million per ton at 1982 

 prices. The IWR's estimate of opportunity costs — 

 apparendy including only such costs that are related 

 to modifications — was $409 million, with median 

 costs of $13,523 for commercial projects, $8,000 

 for government, and $263 for individuals.** As with 

 other IWR estimates, these figures suffer from more 

 or less serious methodological difficulties (16). 



I 

 I 



"Institute for Water Resources, op. cit., p. 174. See pp. 153-157 

 for methodology. 



DISTRIBUTION OF COSTS 



As highlighted by IWR, the manner in which 

 the costs of a regulatory program are distributed 

 across different sectors of society is of interest. 

 Respondents to the RIA were fairly consistent in 

 their classification of those sectors of industry and 

 society that they rated as being negatively affected. 

 The great majority of responses rated residential 

 development, small business, the manufacturing in- 

 dustry, and the mining industry as suffering adverse 

 impacts from the Corps regulatory program. Oil 



and gas development was highlighted specifically 

 by several respondents. Somewhat less but still large 

 majorities also saw negative impacts occurring in 

 the "business-commerciad-industrial sector" and 

 in the construction industry.*' 



"Institute for Water Resources, op. cit., p. 175. "Transportation 

 Utilities" were also rated by IWR as being negatively affected; how- 

 ever, responses to the RIA questionnaire were divided almost evenly. 



