Healthy Ecosystems and
Healthy Economies:
Lessons from Alaska
Anne Gore & Steve Colt  November 16, 2010
President Carter’s Question
NYT, 24 July 1980
Carter’s question
“How can you preserve the beauty of God’s
Carter’s questions
• Carter said: it’s jobs versus environment
But, healthy ecosystems can be source of livelihood
• Carter said, Alaska has done a good job at balance
Does evidence support this assertion?
Do people believe it?
Does current policy reflect this?
• So what:
If it works in Alaska, will it work in the circumpolar
Arctic?
Example 1:
Southeast
Alaska
Southeast Alaska
6
Southeast Alaska –
economic history
7
‘ “It looks like Hell,” but
not cutting the trees would
be “ludicrous” from a
business standpoint’
- former Sealaska CEO Byron
Mallott (quoted in Anchorage Daily News)
8
Sisk 2007
Pulp mills
built
Native logging
starts
Pulp mills
close
Southeast Alaska: economic
history
The economy changed
Relative shares of employment in Southeast Alaska, 1970-2005
100%
90%
80%
Government
70%
60%
Trade & services
Other basic,
infrastructure
50%
40%
Timber
30%
20%
Fish
10%
0%
1970
1980
1990
2000
2005
Colt, Fay &Dugan 2007
Shift toward non-wage income
Real personal income (millions) by type, all SE Alaska
3,000,000
2,500,000
adjustments
2,000,000
transfers
1,500,000
div, int. rent.
1,000,000
residence adj
proprietors
500,000
wage/salary
0
-500,000
1970
1980
1990
2000
2003
Colt Fay & Dugan 2007
Components of population
change
80,000
70,000
60,000
50,000
net migration
40,000
natural increase
initial population
30,000
20,000
10,000
0
-10,000
April 1
1970
70-80
80-90
90-00
00-02
July 1 2002
Colt Fay & Dugan 2007
Economics of wilderness, according to Calvin
Total economic value
Sport
fishing
Charter
sport
fishing
Whalewatching
use
consumptive
Marketed
nonconsumptive
non-use
However,
you can’t eat the scenery
• How can local residents capture some of the “total
economic value”?
• Specifically, tourism is often touted as eco-friendly
industry:
• Does it scale up?
• Can it play a significant role in a northern regional
economy?
Field research:
• “Tourism” is not an industry,
• It is a mixture of industries
• Lodging
• Food
• Tours / charters
• Transportation
• Often run by sole proprietors
Research questions
1. How big is nature-based tourism in
southeast Alaska?
2. Where does it occur (who benefits)?
3. What activities generate cash?
4. Which ecosystem services, from
where, are primary sources of tourism
value?
Darcy Dugan, Ginny Fay, Steve Colt
Institute of Social and Economic Research
University of Alaska Anchorage
TWS Forum on Tongass Planning
March 28, 2007
NBT is big business
Total documented revenue :
$327 million
Dugan, Fay et al. 2009
Revenue reaches all communities
Prince of
Wales, 29
Chichagof
Island, 16
Petersburg, 3
Wrangell, 2
Ketchikan, 50
Sitka, 74
Juneau, 154
Total Southeast = $327 million
Misty Fjords
$20 million +
• Flight seeing
– 10 operators
– >600 people per day
• Marine cruises
– 2 large operators
– Combined cruise/flightseeing tour
Dugan, Fay et al. 2009
Juneau
Fly-up dog “mushing” generated $??
$16 million from 30,000 people
Dugan, Fay et al. 2009
Whale watching from
Juneau ??
$32 million from 230,000 people
Dugan, Fay et al. 2009
Elfin Cove
Total Revenue: $4.2 - 5.2 million per year
Sport fishing mecca
– 9 Fishing lodges
– 5-day package, all inclusive
– Average price: $577/person/night
– Supplies and transportation services purchased from
Juneau
Dugan, Fay et al. 2009
Hoonah – Icy Strait Point
Alaska Native involvement
Icy million
Strait Pointfrom 30,000+ people
$4+
– Old cannery reinvented as cruise ship port of call
– 1.5 miles from village of Hoonah
– Huna Totem [Native] Corporation, owner
– Pt. Sophia Dev. Corp, operator
– 124 employees, 96% local (2005)
Dugan, Fay et al. 2009
New Tourism (ad)Ventures
“Adventure-karts”
Snorkeling
Amphibious “duck” tours
Biking
Glass bottom boats
Zip-line canopy tours
“Rainforest Sanctuary”
Where is
value
generated?
Charter
sportfishing:
197,492 clients
52,052 trips
$87.5 million
gross revenue
Fay, Dugan et al.
2007
Lessons & challenges from
Southeast Alaska
• Nature tourism can grow fast and be big
• It’s risky; many business experiments failed
• Small businesses can grow and get cruise
passengers to spend money onshore
-This will be a challenge for Arctic tourism
Challenge: price vs. volume
• Total revenue depends on
(Number of people) x (price paid per person)
• There is tension, already, between these two
Challenge: change creates
losers as well as winners
Change in wage employment in Southeast AK census areas,
1993-2002
Colt & Fay 2007
Final lesson/challenge:
• Hard to change “timber
mindset” and thereby
change FS management of
public lands
Example 2: Bristol Bay
The ANILCA Challenge:
“Balance the national interest in Alaska's scenic and
wildlife resources with recognition of Alaska's fledgling
economy and infrastructure, and its distinctive rural
way of life.”
Bering Sea
Bristol
Bay
Wildlife Habitat
“No place else on Earth so
important to so many birds
from so many different
continents as Bristol Bay.”
(Audubon Alaska 2005)
- World’s most productive
eelgrass beds
- 4 migratory flyways
Salmon
Sockeye Salmon
Fisheries Economy
75 percent of local employment – commercial salmon
fishing and processing
The Bering Sea/Bristol Bay fishery is worth more than $2
billion annually
Bristol Bay/Bering Sea catch accounts for more than half
of US fisheries production
Other major commercial fish – pollock, cod, halibut, king
crab
Fish & Culture
Subsistence fishing is vital
to the nutritional and
cultural needs of
Alaska Natives in the
Bristol Bay region
Fish make up more than
half of the wild food
diet of most Alaska
Natives in Bristol Bay
The culture of
commercial fishing
• Commercial fishermen
Sportfishing
Bristol Bay (2007)
• $90 million in
recreation expenditures
• 847 jobs and $27
million in wages and
benefits attributed to
sport fishing
• 37,000 sport fishing
trips (rivers and lakes)
• One-third of visitors
are from out of state
Pebble Mine
• Proposal to build world’s largest gold and
copper mine
• Large open pit and underground mine
• Located at headwaters of major salmon
streams
• Water removal and waste threatens whole
Bristol Bay watershed
Fish vs. mining
Gold vs. “Red Gold”
Mine opponents say:
Salmon is more valuable than gold
• $350 million per year and 16,000 seasonal
jobs (6,000 full-time jobs) forever
Offshore Drilling
25 Years of Leasing Limbo
1986 – OPEN
MMS opens Bristol Bay to exploration
1989 – CLOSED
Exxon Valdez spill prompts Congress to close Bristol Bay and
other OCS areas to new oil and gas development.
1995
DOI buys back oil company leases
2003 – first steps taken to OPEN Bristol Bay to oil exploration
2007 – OPEN
Drilling moratorium removed. Lease sale scheduled.
2010 – CLOSED
DOI removes Bristol Bay from lease sale process until 2017.
Lessons & challenges from
Bristol Bay
If it ain’t broke, don’t break it
North Slope Oil
North Slope petroleum
has been a vital part of Alaska’s
economy since 1968
Cumulative N Slope
production
Thomas et al. 2009
www.netl.doe.gov/technologies/oilgas/publications/AEO/ANS_Potential.pdf
Oil supports 1/3 of Alaska
economy
North Slope Borough
• Property taxes on North slope oil fields yield
$300 million for 7,000 people
• Billions spent since 1980 on schools, roads, water,
sewer
www.co.north-slope.ak.us/information/budget/fy11/index.php
Ecotrust: www.inforain.org/northslope/anwr_2.html
NAS weighs in – (again)
NAS 2003 http://books.nap.edu/catalog.php?record_id=10639
Arctic Refuge footprint
Ecotrust: www.inforain.org/maparchive/mAdtl.php?mbID=306
Total oil lease footprint, 2008
DOE/NETL 2009
www.netl.doe.gov/technologies/oil-gas/publications/AEO/ANS_Potential.pdf
Pew Arctic Program 2010
Pew Arctic Program 2010
NAS 2003
North Slope lessons &
challenges
• Oil & gas extraction is a major industrial activity,
no matter how you do it
North Slope lessons &
challenges
• There is crucial, critical, difference between
onshore and offshore (marine) development
• Applies to oil & gas, and tourism too!
Implications of Alaska
experience for Arctic places
• Tourism can be a significant source of revenue
to local people
• Challenge to get people off their cruise ships:
Onshore infrastructure – including “human
capital” is essential
• Let the market work, encourage experiments to
develop new experiences that people will pay for
• Preserve (at least some) undisturbed Arctic
environment as an economic asset
Implications: Arctic tourism
• Recognize the value-volume tradeoff
• It’s all about scale
Implications for
Arctic Policy
• “Skate to where the puck is going”*:
Make decisions with future change in mind
• Maintain the ecosystem services that are becoming
most scarce; these have highest potential future
economic & social value to people
*attributed to Wayne Gretzky aka “The Great One.”
The End ~ Thank You
References
[For references and sources related to Bristol Bay, see the notes to individual slides]
Colt, S.; Fay, G.; Dugan, D. 2007. The regional economy of Southeast Alaska.
Anchorage: ISER.
http://www.iser.uaa.alaska.edu/Publications/SoutheastEconomyOverviewfin
al4.pdf
Dugan, D; Fay, G; Griego, H.; Colt, S. 2009. Nature-based tourism in Southeast
Alaska. Anchorage: ISER Working Paper 2009.1.
http://www.iser.uaa.alaska.edu/Publications/workingpapers/WP2009%201_
SEnbt_final.pdf
Fay, G.; Dugan, D.; Fay-Hiltner, I.; Wilson, M.; Colt, S. 2007. Testing a
methodology for estimating the economic significance of saltwater charter
fishing in Southeast Alaska. Anchorage: ISER.
http://www.iser.uaa.alaska.edu/Publications/EconSE_Saltwater_Charter_Fis
h_070530.pdf
References
National Academy of Sciences. 2003. Cumulative environmental effects of oil
andgasactivities on Alaska's North Slope. National Academies Press.
http://www.nap.edu/catalog.php?record_id=10639
Pew Environment Group. 2010. Oil spill prevention and response in the U.S. Arctic
Ocean. Policy recommendations by the Pew Environment Group.
http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Protecti
ng_ocean_life/PEW-1010_ARTIC_Policy_Recs.pdf ?n=2496
Sisk, J. 2007. The Southeastern Alaska Timber Industry: Historical Overview and
Current Status. Section 9.6 in Schoen, J. and Dovichin, E., editors. The
Coastal Forests and Mountains Ecoregion of Southeastern Alaska and the
Tongass National Forest. A CONSERVATION ASSESSMENT AND
RESOURCE SYNTHESIS. (March).
http://home.gci.net/~tnc/HTML/Resource_synthesis.html
Thomas, C.; et al. 2009. Alaska North Slope oil and gas: a promising future or an
area in decline? U.S. Dept. of Energy, Arctic Energy Office and NETL.
www.netl.doe.gov/technologies/oil-gas/publications/AEO/ANS_Potential.pdf