a new tool for estimating and simulating economic impacts of dredging activity new, increased and...

A New Tool for Estimating and Simulating Economic Impacts of

Dredging ActivityNew, Increased and Reduced

Dredging

Drs. Yue Cui and Ed Mahoney, Michigan State Universityand Dr. Wen–Huei Chang, Institute of Water Resources, USACE

Functions of the New Tool

1. Simulate the “economic effects” of new, increased, decreased or the stoppage of dredging

2. Estimates direct and secondary impacts: sales, employment and income

3. Estimates direct and “stemming –from” impacts

4. Enables users to identify and assess impacts for very specific economic impact areas

Tool is being Modeled After the USACE’s RECONS Model and Other Web-based Economic Impact Tools

Designed By MSU

1. Regional Economic System (RECONS) provides accurate and defensible estimates of local job creation and retention and other economic measures such as value added, income and sales

2. RECONS allows the USACE to evaluate direct investment spending associated with the annual Civil Work budget of the eight business lines managed by the USACE.

3. RECONS also enables users to evaluate the economic contribution of industries and activities that are dependent on or benefit from USACE programs and infrastructure; these downstream effects are termed “stemming from effects.”

RECONS Approach – USACE Project Work Activities Economic Impacts

Business Line Contracted Project Work

Activities

Expenditure by Work Activities

Navigation, Hydropower, Environmental, Flood Risk, Emergency Management, Regulatory, Recreation, Water Storage

Dredging, Lock Construction, Levee Repair, Investigations

Spending Profiles and IMPLAN Industry Data

Labor, Materials, Equipment, Fuel, Services and Other Expenditures

Impact Areas and Multipliers

Economic Impacts

Direct, Indirect and Induced EffectsMeasured as Jobs, Earnings, Output (Sales), and Valued

Added (GDP)

IMPLAN Industry Multipliers(Region, State, Nation)

Economic Impacts of Dredging

1. Economic Impacts of Dredging Related Spending

2.1 Commercial Use of Dredged Materials 2.2 Beneficial Re-use of Dredged Materials

3. Stemming From Economic Impacts 3.1 Enhanced Shipping Capacity 3.2 Cruise Ships 3.3 Marinas 3.4 Commercial Fishing

Dredging Proposal and Definition of Economic Impact Area

2Define and Describe

Economic Impact Area

1.Describe Dredging Project

Including Alternative Scales and Requirements

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3.DESCRIB

EDREDGI

NGACTIVITI

ES

PREPARATIONINVESTIGATIONACQUIRE LAND

PERMITS

DREDGING SITE TYPE OF

WATERBODYGEOGRAPHY

TYPE OF DREDGE MATERIAL

SAND, GRAVEL,CLAY,

MUD, CONTAMINATION

AMOUNT OF MATERIAL TO BE

REMOVEDYards of Material

4.$$$

Budget(Cost) Breakdown:

LaborReal EstateMaterialsSupplies

FuelPer Diem

DREDGING METHOD

HOPPER, PIPELINE,MECHANICAL

LOCATION & ACQUISITION OF PLACEMENT SITE

RENTALPURCHASE

PLACEMENT METHOD

OPEN-WATERCONFINED DISPOSAL

BENEFICAL RE-USE

Direct Dredging Spending : Items and Amounts

-

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DredgingBudget(Cost) Breakdown:

LaborReal EstateMaterialsSupplies

FuelPer Diem

5. Estimate

Costs/Spending

Across Different

(IMPLAN)Industries

6.Calculate and

Apply Multipliersand LPCs

for Economic Impact

Area

7.Estimate Direct &

Secondary[Indirect –Induced] Economic Impacts

Direct Dredging Spending : Economic Impacts

The USACE’s RECONSEconomic Impact

Assessment of Dredging Project

The USACE’s RECONSEconomic Impact

Assessment of Dredging Project

Dredging Proposal and Definition of Economic Impact Area

Dredging Proposal and Definition of Economic Impact Area

The USACE’s RECONSEconomic Impact

Assessment of Dredging Project

The USACE’s RECONSEconomic Impact

Assessment of Dredging Project

Lflfdldfllf;l;l;fSTEMMING FROM

EFFECTSOF DREDGING

CHANNEL IMPROVEMENT

COMMERICAL SHIPPING

RECREATIONAL BOATINGMARINAS & ACCESS

CRUISE SHIPSHARBORS & ACCESS

COMMERCIAL FISHING HARBOR & ACCESS

BENEFICIAL USES OF DREDGE MTERIALS

COMMERCIAL SALE OF DREDGE MATERIAL

USE OF MATERIALSBEACH

HABITATRESTORATION

Stemming-From Economic Impacts of Dredging

Lflfdldfllf;l;l;fBENEFICIAL RE-USES OF DREDGE MATERIALS

COMMERCIAL SALE OF DREDGE MATERIAL

RE-USEUSE OF MATERIALS

Capping a landfill or brownfield

Transforming dredged material into lightweight aggregates

Reclaiming lands impaired by sand, gravel, and coal mining

Manufacturing bricks and blocks and construction aggregates

Creating fill for construction projects

Wetland creation and restoration

Creating wildlife habitat

Levee maintenance

Landfill daily cover

Beneficial Uses of Dredge Materials

Lflfdldfllf;l;l;fCHANNEL IMPROVEMENT

COMMERICAL SHIPPING

RECREATIONAL BOATINGMARINAS & ACCESS

CRUISE SHIPSHARBORS & ACCESS

COMMERCIAL FISHING HARBOR & ACCESS

Stemming-From Economic Impacts of Dredging

The USACE’s RECONS Newly Enhanced (Stemming

From Effects) Port Model

The model allows users to estimate the stemming from effects of port industries based on a modified version of Port Kit consist of the following: 

1. Definition of Port locations and impact areas

2. Mapping of RIMSII industries to IMPLAN industries; extracting relevant industry economic multipliers derived from IMPLAN

3. Port default expenditures by sector for cargo

4. Identify cargo tonnage

5. Modal shares and distance for inland movements

RECONS: Port Model

Choose Type of Impact – Origin and/or Destination

Impacts

The Impact Region, Multi-State Region, and Nation

Choose Impact Area

18 Cost Profiles for Shipper Rates Shipper Rates IMPLAN Sector (No.)WW line-haul Waterborne transport (334) Assessorial W Trans support svcs (338)

Calculate Multiplier Effects Direct Sales * Multipliers

and Ratios

Jobs, Income, Value Added, Sales for

Waterway Industries

Identify Tons Shipped by

Commodity

Calculate Direct ImpactsShipper Rates * Tons Shipped

RECONS: Newly Enhanced Port Model

Cargo Volume by Shipping Type

Per Unit Expenditure by Type of Cargo

Inflation-adjusted Port Kit default values for

labor, materials, equipment, fuel, services

Industry Multipliers

Economic Contribution

Direct, Indirect and Induced Effects

Measured as Jobs, Earnings, Output

(Sales), and Valued Added (GDP)

IMPLAN Industry Multipliers

(Region, State, Nation)

Identify Port And Associated Impact

Area

Modal Share & Distance of Inland Movements

Percent Rail, Short/Long Distance Truck, Barge,

Air (FAF2)

RECONS User Input -- Cargo Forecast (Port

Data/Research)

Total Expenditure

Cargo Volume by Shipping Type and Commodity Type

Total Expenditure by Each Type of Commodity

Economic Contribution by Each Type of Commodity

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping

The RECONS port module estimates the economic contribution of cargo shipments within ports for various types of cargo (for example, dry bulk, automobiles, containers, etc.).

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping1. The cost elements associated with the port include port services, cargo handling, fuel service, vessel and crew supplies, cargo storage, cargo packing and unpacking, crew leave and finally, inland transport costs.

2. The costs were then aggregated by IMPLAN sector for each type of cargo to summarize the costs for the various types of cargo by type of cost, with the appropriate IMPLAN industry.

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping

The USACE’s RECONSEconomic Impact

Assessment of Ports and Shipping

The USACE’s RECONSEconomic Impact

Impact Assessment of Marinas

The USACE’s RECONSEconomic Impact

Impact Assessment of Marinas

The USACE’s RECONSEconomic Impact

Impact Assessment of Marinas

The USACE’s RECONSEconomic Impact

Impact Assessment of Marinas

The USACE’s RECONSEconomic Impact

Impact Assessment of Marinas

Questions?