Ch. 7— The Effects of ttie 404 Program • 153 



Immediately after the expansion of the section 

 404 program to nonnavigable waters in 1975, we 

 anticipated over 180,000 permit requirements per 

 year for forest management activities. As the result 

 of the passage of section 404(f), this problem has 

 decreased to 0.1 percent of our original projection. 

 We would currently estimate section 404 as rep- 

 resenting a relatively small proportion of the total 

 burden of Federal and State regulation that our 

 industry faces. 



With respect to the importance of section 404, 

 compared to general economic conditions; high in- 

 terest rates (to use the example cited) have resulted 

 in the poorest forest products market since 1930. 

 Consequently, compared to current economic con- 

 ditions section 404 is a relatively minor concern. 



The IWR report found that changes in the na- 

 tional economy caused by the 404 program are dif- 

 ficult or impossible to measure (e.g., using the GNP 

 or consumer price index (CPI) figures). It con- 

 cluded that while impacts on individual firms could 

 be significant, such impacts are unlikely to have 

 any major effect on the national economy." 



The impacts of the 404 program on national se- 

 curity concerns are unclear. For example, Alaskan 

 energy development appears to be subject to per- 

 mitting delays more from State agencies than from 

 the Federal agencies involved in the program. It 

 could be contended also that the development ac- 

 tivities affected by section 404 are not constrained 

 to such an extent that nationcd security is threat- 

 ened. For example, it could be argued that suffi- 

 cient amounts of the resources in question can be 

 obtained from nonwetland areas to meet U.S. 

 needs. 



One study of the effect of section 404 on the deep- 

 ening of coal ports concluded that 404 reviews have 



"Institute for Water Resources, op. cit., p. 184. The IWR report 

 concluded that it is likely that all Federal environmental regulation 

 combined has had a very small effect on the GNP and CPI, and the 

 404 program is only a small part of this regulation. See also the Western 

 Governors' Policy Office, "Permitting and Siting of Energy Projects: 

 Causes of Delay, and State Solutions," Denver, 1981 , which concluded 

 that environmental regulations constituted a relatively minor source 

 of delay to energy projects in Western States, as compared with 

 equipment- and labor-related problems. 



not aind are not likely to constrain either such deep- 

 ening or the development of U.S. coal exports. De- 

 lays in port dredging are attributable to other 

 sources.^" 



Environmentalists are quick to point out that 

 there may be national costs associated with degrada- 

 tion and conversion of aquatic habitats required to 

 sustain wildlife. National estimates for 1980 show 

 that commercial and noncommerciEil activities as- 

 sociated with fish, wildlife, and associated outdoor 

 activities are worth many billions of dollars per 

 year. Some of these economic values are described 

 in chapter 3. Maintenance of the habitat base re- 

 quired to perpetuate wildlife resources is important 

 for economic as well as other purposes. 



Costs to Permit Applicants 



Major categories of costs to applicants for 404 

 permits involve processing, modification, delay, 

 and opportunity.^' These costs are borne not only 

 by permit applicants but also by people who would 

 otherwise benefit from the activities permitted. 

 Projects that are abandoned, made less profitable, 

 or never initiated mean potential losses in job op- 

 portunities, economic development, and tax reve- 

 nue. On the other hand, protection of wedands has 

 its own set of benefits that may include higher re- 

 turns in some areas. In addition, losses both to proj- 

 ect initiators and potential beneficiaries will be offset 

 if, as is likely, the resources that would have been 

 used in a wetland-related project are used in some 

 other fashion. From the standpoint of the national 

 economy, there might be no net change. However, 

 great changes in which areas experience benefits 

 could result. 



Finally, there are nonquantifiable costs to the 

 permit process, such as the energy and aggrava- 

 tion entailed in filling out forms and meeting with 

 agency officials. 



^"Michael Rubino, "Dredge or Fill, Section 404, and Coal Port 

 Development," Brookhaven National Laboratory, 1983, pp. 6-7. 



^'Institute for Water Resources, op. cit., pp. 144-145. Categories 

 are modifications of categories listed. 



