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|S03) 233-5823 

 Fax (S03| 233-3076 

 Northwest IrrigeltiOn Utilities 82S NE Multnomah, suite lOIS • Pomand. Oregon 97232 



October 21, 1992 



Dr. Don Bevan, Chair 



NMFS Salmon Recovery Team 



College of Oceans and Fisheries Sciences 



Dean's Office, Henderson HaD 557 



University of Washington HN-15 



Seattle, WA 98195 



Dear Dr. Bevan: 



The enclosed working paper, 'The Path Toward Cost-Effectiveness," represents continued 

 work by NIU to bring fundamental resource economics methods to bear on the salmon 

 recovery issue. 



The paper analyzes the cost-effectiveness-essentially biological effectiveness-of several 

 major salmon recovery alternatives. The cost-effectiveness methodology applied here is 

 the same methodology that was presented to the recovery team in May of this year, and 

 discussed in greater detail with Dr. Crutchfield. The methodology is straightforward and 

 pragmatic, it reduces the uncertainty in assessing fish production and cost estimates, and 

 it is consistent with the objectives of the recovery team- 



You will note that the analysis findings parallel marry of the basic conclusions that you 

 have publicly discussed. This should come as no surprise. Under a cost-effectiveness 

 framework, biological effectiveness and cost-effectiveness go hand-in-hand. 



Over the course of the next few months, more data and information will be available to 

 modify and improve some of the economic and biological estimates contained within the 

 paper (as well as different alternative configurations). Nevertheless, the basic direction 

 of the finriing«i within the paper is unlikely to change significantly. 



Upon your request, I would be glad to discuss this work directly with you or with the full 

 salmon recovery team. 



Respectfully, 



DafryU Olsen, PhJD. 

 Regional Planner/Resource Economist 



Irngaaon • Agncuiture • Energy 



