Economist Robert Litan on Economics of Restoration and Why Presidential Candidates Should Care about the Lakes

The Healthy Waters, Strong Economy:The Benefits of Restoring the Great Lakes Ecosystem report released by Brookings Institute last week was authored by distinguished economist, Robert Litan. Currently, Litan is Vice President of Research and Policy at the Kauffman Foundation and is a Senior Fellow with Brookings in Washington, DC. Litan has also served as Associate Director of the Office of Management and Budget (’95-’96) and as Deputy Assistant Attorney General at the Justice Department, in charge of the Antitrust Division (’93-’95). He brought his esteemed analytical skills to this project, the result of which found that spending $26 billion to implement the Great Lakes┬áCollaboration Implementation Act – the embodiment of the Great Lakes Regional Collaboration blueprint – would generate more than $50 billion in long-term economic benefit for the region. The Great Lakes would be restored, jobs would be created, property values would see a boost, wastewater treatment costs would go down and new business and new residents would be attracted to the region. After discussing the findings of this landmark economic analysis at the annual Healing Our Waters conference, he took a few minutes to speak with HOW’s blogger.

Q: In your view, what is the most important finding from this report?
A: The headline finding: the benefits are greater than the cost of doing the cleanup by a healthy margin, roughly two to one.

Q: Were you surprised by the outcome of the analysis?
A: I had no idea what the number would be going into the analysis, as I said in the talk today we used two different methods for calculating the analysis. We as a team were hoping the two methods would give roughly the same answer and it turns out we were right – pleasantly they did. I want to underscore, I had no preconceived idea what the numbers would come out to.

Q: Why should presidential candidates pay attention to this report?
A: The United States has multiple natural resource assets, examples include our national parks, our incredible systems of rivers, lakes and mountains. All the natural things that make this a beautiful country. I think ALL of our citizens care about these things and I’m assuming all the presidential candidates would too. The Great Lakes collectively are certainly one of our most treasured national resources and the Great Lakes have problems, environmental problems, and so for anyone who cares about passing on our resources from one generation to another this should be a source of concern. The contribution of this study, is that addressing this concern would actually generate economic benefits substantially exceeding the cost of undertaking the effort. So I would hope candidates of all parties would recognize the impact of this just as they recognize the importance of preserving our other natural resources.

Q:What do you hope readers take away from this report?
A: That one can take a hard headed economic or business-like approach to cleaning up the environment and come out with an answer that environmentalists too would agree with.

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