Green economists criticize copper mining impact studyThe economic analysis of mining in Northeastern Minnesota that was used to evaluate impacts of the PolyMet project was fundamentally flawed and “falls squarely at the low-quality end of the spectrum.”
By: John Myers, Duluth News Tribune
The economic analysis of mining in Northeastern Minnesota that was used to evaluate impacts of the PolyMet project was fundamentally flawed and “falls squarely at the low-quality end of the spectrum.”
That was the critique released Tuesday by two environmental economists who were asked by the group Northeastern Minnesotans for Wilderness to weigh in as the PolyMet project is open for public review.
As part of any major environmental review, state and federal agencies also are obligated to determine what the economic impacts of doing or not doing the proposed project might be.
The economic impact analysis of mining in Northeastern Minnesota, conducted by economists at the University of Minnesota Duluth’s Labovitz School of Business and released in 2012, was later used in the economic impact portion of the ongoing PolyMet Environmental Impact Statement that’s now open for public review.
The UMD study — led by Jim Skurla, director of the school’s Bureau of Business and Economic Research — gave a glowing prediction of copper mining’s potential economic stimulus and how many jobs might be created, both directly in mining and indirectly in regional jobs created to serve the new kind of mining in Minnesota.
On Tuesday, Northeastern Minnesotans for Wilderness released the critique by Spencer Phillips and Evan Hjerpe claiming the authors of the UMD study “failed to adhere to a number of the most critical EIA methods. Multiple violations of standard EIA methodology undermine” the UMD study’s results.
The issue is important, the environmental group notes, because the UMD study is being used to validate the PolyMet project economically.
“It’s not just part of the PolyMet EIS. It’s being presented to city councilors and county commissioners, and all across the state, as the reason why mining is so important in Minnesota; why copper mining will be so great. But if the data was flawed, people are getting the wrong information,” said Becky Rom, vice chairwoman of Northeastern Minnesotans for Wilderness.
Skurla did not immediately return efforts to contact him Tuesday.
Phillips and Hjerpe are hardly unbiased on natural resource issues; both have long-term ties to the environmental community.
Phillips is the principal for Key-Log Economics and a lecturer at the University of Virginia. He was formerly vice president for ecology and economics research for the Wilderness Society, where he oversaw the group’s economic, ecological and resource policy research. He earned a B.A. in economics from the University of Virginia and an M.S. and Ph.D. in agricultural and applied economics from Virginia Polytechnic Institute.
Hjerpe is an environmental economist consultant based in Boise, Idaho. He was formerly a senior economist for the Wilderness Society. Before that, he had been a visiting professor at Northern Arizona University’s School of Forestry where he earned both a master’s and a Ph.D. in natural resource economics and forest management.
Phillips and Hjerpe went on to say that the UMD report used “underlying technical assumptions that lead to an unrealistic picture of the regional economy,” inflating the effects of specific projects and the so-called jobs multiplier to create spinoff jobs.
“Additional problems and technical errors were also found throughout the report that lead to consistently inflated economic impacts,” the authors conclude.
The economists said perhaps the greatest shortfall of the UMD study is that it listed potential benefits of new mining without weighing them against any potential economic costs or downfalls.
“The public interest should be most concerned with the long-term consequences of mining development, the cost incurred and the opportunities that will be lost,” they noted.