A New Tool for Estimating and Simulating Economic Impacts of Dredging Activity New, Increased and Reduced Dredging Drs. Yue Cui and Ed Mahoney, Michigan State University and 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 Effects Measured 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 2 Define and Describe Economic Impact Area 1. Describe Dredging Project Including Alternative Scales and Requirements

Lflfdldfllf;l;l;f 3. DESCRIBE DREDGING ACTIVITIES PREPARATION INVESTIGATION ACQUIRE LAND PERMITS DREDGING SITE TYPE OF WATERBODY GEOGRAPHY TYPE OF DREDGE MATERIAL SAND, GRAVEL,CLAY, MUD, CONTAMINATION AMOUNT OF MATERIAL TO BE REMOVED Yards of Material 4. $$$ Budget(Cost) Breakdown: Labor Real Estate Materials Supplies Fuel Per Diem DREDGING METHOD HOPPER, PIPELINE, MECHANICAL LOCATION & ACQUISITION OF PLACEMENT SITE RENTAL PURCHASE PLACEMENT METHOD OPEN-WATER CONFINED DISPOSAL BENEFICAL RE-USE Direct Dredging Spending : Items and Amounts

- Lflfdldfllf;l;l;f DIRECT ECONOMIC IMPACTS OF DREDGIN EXPENDITURES Dredging Budget(Cost) Breakdown: Labor Real Estate Materials Supplies Fuel Per Diem 5. Estimate Costs/Spending Across Different (IMPLAN)Industr ies 6. Calculate and Apply Multipliers and LPCs for Economic Impact Area 7. Estimate Direct & Secondary [Indirect –Induced] Economic Impacts Direct Dredging Spending : Economic Impacts

The USACE’s RECONS Economic Impact Assessment of Dredging Project

Dredging Proposal and Definition of Economic Impact Area

The USACE’s RECONS Economic Impact Assessment of Dredging Project

Lflfdldfllf;l;l;f STEMMING FROM EFFECTS OF DREDGING CHANNEL IMPROVEMENT COMMERICAL SHIPPING RECREATIONAL BOATING MARINAS & ACCESS CRUISE SHIPS HARBORS & ACCESS COMMERCIAL FISHING HARBOR & ACCESS BENEFICIAL USES OF DREDGE MTERIALS COMMERCIAL SALE OF DREDGE MATERIAL USE OF MATERIALS BEACH HABITAT RESTORATION Stemming-From Economic Impacts of Dredging

Lflfdldfllf;l;l;f BENEFICIAL 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;f CHANNEL IMPROVEMENT COMMERICAL SHIPPING RECREATIONAL BOATING MARINAS & ACCESS CRUISE SHIPS HARBORS & 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 Impacts Shipper 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 (FAF 2 ) 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 RECONS Economic 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 RECONS Economic Impact Assessment of Ports and Shipping

1. 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 RECONS Economic Impact Assessment of Ports and Shipping

The USACE’s RECONS Economic Impact Impact Assessment of Marinas

 Questions?