Pebble mine should provide fishery's safety net

In part one of this column on Saturday, some of the history of environmental protection was described as it affects the proposed development of the Pebble mine.

For most local residents, the biggest single worry about Pebble concerns the effect it would have on the fisheries of Bristol Bay and thus the economy of that region. There are ways to address that worry.

Out of the stress of the Great Depression, the Roosevelt administration developed a safety net for the agricultural industry that has lasted into the current era. In its first half century, these price support programs made American agriculture first in the world, a massive influence sustaining global and domestic food supplies as well as giving America's farmers a more consistent, modest prosperity. More recently, the rise of the corporate base to agriculture may have made that program obsolete but for its time and place, the concept was sound.

America's fisheries never had the pricing safety net that allowed American agriculture to prosper. When regulation came, federal harvesting limits had some influence in preserving stocks. With statehood, Alaska's regulation set an international mark for improved economic rationality. But the fisheries are still plagued by feast-or-famine income.

To draw on another public policy analogy, Alaska fishermen all but universally felt abused by the drawn-out and painful compensation system for losses from the Exxon Valdez spill. President Obama demanded and got a $20 billion fund for payouts for the Gulf spill, which has worked better, if imperfectly.

The economic consequences of Pebble for the Bristol Bay fishery are not likely to arrive by dramatic disaster. The problems will be those of slow decline, of mysterious shortfalls, matched with denials of responsibility and an endless, quasi-scientific harangue over the source of the problem. If mining is to take place with the potential to destroy the fisheries economy, the most appropriate mitigation to this effect may well be an income safety net that applies without proof of causation.

Since this is a specific threat from a specific industry, the safety net should be financed not by the government but by the industry threatening the fisheries. If international mining interests want to go ahead with the development of a giant mine in a fisheries watershed, they should be prepared to fund a guaranteed flow of fish or a cash equivalent, no questions asked.

If Pebble undertakes an income guarantee system, it will be powerfully motivated to make sure that the natural fisheries produce as they have over the years, and to minimize interference with this cornucopia of fish whether from mining or any other activity. By easing concern among the residents of Bristol Bay, it will also reduce the pressure to stop Pebble "no matter what."

How might such a program work? The ultimate design is a matter for negotiation and economic expertise. But to start with an example, the guarantee should be measured by the fish, not the wage alone. For purposes of mathematical simplicity, assuming an average run of 5 million fish, a catastrophic low at zero fish and an average price of $8 per fish, the initial fund should have a capitalization allowing repeated hits of $40 million (in this example).

The fund should be created in advance of moving any rock and, like the president's Gulf fund, be run by an independent fund manager with a local advisory committee. Persons who have an economic reliance on the fishery, whether captains, owners, crews, processors or marketers, can pre-register for income insurance and be allocated a share based on classifications related to actual, average income. Assuming that 40,000 people have some degree of economic reliance, the percentage of each claimant will be small but, as applied to the millions to be distributed in a bad year, should result in a significant contribution to income.

What is here proposed is a concept, not a solution, but some form of guaranteed annual wage -- guaranteed not by the government but by the mine -- should be included in any list of required mitigations to the permitting of the Pebble mine.

John Havelock has taught public policy at UAA since his retirement as a professor of justice. He also is a former Alaska attorney general.