ECONOMIC IMPACT OF REINDEER-CARIBOU INTERACTIONS ON THE SEWARD PENINSULA By Stefanie Moreland Carlson RECOMMENDED: _______________________________________ _______________________________________ _______________________________________ Advisory Committee Chair _______________________________________ Director, Program in Resource and Applied Economics RECOMMENDED: _______________________________________ Dean, School of Management _______________________________________ Dean of the Graduate School _______________________________________ Date ECONOMIC IMPACT OF REINDEER-CARIBOU INTERACTIONS ON THE SEWARD PENINSULA A THESIS Presented to the faculty of the University of Alaska Fairbanks in Partial Fulfillment of the Requirements for the Degree of MASTER OF SCIENCE By Stefanie Moreland Carlson, B.S. Fairbanks, Alaska May 2005 iii Abstract The reindeer industry has persisted on the Seward Peninsula in western Alaska for more than 100 years. Since the mid 1990’s the industry has been increasingly threatened by changes in Western Arctic Caribou Herd (WACH) migration paths and winter range. Free-range reindeer (Rangifer tarandus tarandus) intermingle with caribou (Rangifer tarandus granti) and migrate off designated reindeer ranges. As of spring 2003, eleven of fourteen Seward Peninsula reindeer operations were no longer commercially viable as a result of caribou induced reindeer losses. This loss is significant to an economically depressed region with few development opportunities. An economic input-output model was constructed in this study to analyze the reindeer industry’s economic role in the regional economy prior to the loss of reindeer to caribou. Impact scenarios were used to estimate the effect of WACH on the regional economy through decreased output from the reindeer industry. Results show a per annum negative impact of $1.4 million (2000 dollars) on the regional economy with 11 non-operational reindeer herds. If reindeer losses lead to complete elimination of the commercial reindeer industry on the Seward Peninsula, study results show the region would incur a total negative economic impact of more than $17 million. iv Table of Contents Signature Page...................................................................................................................iii Title Page..........................................................................................................................iiii Abstract..............................................................................................................................iii Table of Contents...............................................................................................................iv List of Figures....................................................................................................................vi List of Tables....................................................................................................................vii Acknowledgements............................................................................................................ix 1.0 Introduction...................................................................................................................1 1.1 Description of current problem.................................................................................1 1.2 Proposed research.....................................................................................................4 2.0 Background...................................................................................................................7 2.1 History of the reindeer industry................................................................................7 2.2 Reindeer-caribou interaction...................................................................................16 2.3 Policy......................................................................................................................19 2.4 Region.....................................................................................................................23 3.0 Reindeer operations....................................................................................................34 3.1 Reindeer herd management.....................................................................................34 3.2 Availability of information.....................................................................................36 3.3 Outputs....................................................................................................................38 3.4 Inputs.......................................................................................................................46 v 4.0 Impact analysis............................................................................................................56 4.1 Regional economic development theory.................................................................56 4.2 Input-output regional economic analysis................................................................58 4.3 IMPLAN.................................................................................................................67 4.4 Adjustments to IMPLAN database.........................................................................68 4.5 Impact scenarios and results...................................................................................80 5.0 Summary and conclusions..........................................................................................90 5.1 Summary.................................................................................................................90 5.2 Limitations of study................................................................................................95 5.3 Recommendation for further study.........................................................................97 vi List of Figures Figure 1. Nome U.S. Census Area.....................................................................................6 Figure 2. Historic population of reindeer in the Seward Peninsula region, 1951-1977 and statewide, 1891-1977.........................................................................................13 Figure 3. Seward Peninsula..............................................................................................14 Figure 4. Seward Peninsula reindeer range allotments....................................................14 Figure 5. Western Arctic Caribou Herd photo-census population estimates, 1970-2003.................................................................................................................17 Figure 6. Estimated price paid for Seward Peninsula velvet reindeer antler, 1991-2000.................................................................................................................39 vii List of Tables Table 1. Reindeer ownership by group in years 1907 and 1914........................................9 Table 2. Estimated total Seward Peninsula reindeer antler harvested and associated earnings, 1991-2000..................................................................................................38 Table 3. Seward Peninsula Reindeer estimated meat sales for years preceding caribou impact, all herds combined.......................................................................................41 Table 4. Seward Peninsula reindeer herd summary information as presented by Bureau of Indian Affairs annual reports, 1966-1970.............................................................43 Table 5. Seward Peninsula Reindeer herd population as provided by Kawerak Reindeer Herders Association tallies, 1988-1992....................................................................44 Table 6. Translation of the historic levels of meat production on Seward Peninsula reindeer ranges to year 2000 revenues......................................................................45 Table 7. Annual expenditures for a typical reindeer operation (year 2000 dollars)........49 Table 8. Standard layout of an input-output transactions table.......................................62 Table 9. Estimates of reindeer industry inputs per IMPLAN sector, grouped by major expense category.......................................................................................................75 Table 10. Estimates of reindeer industry employment and value added coefficients......78 Table 11. Estimated per annum effect of the Seward Peninsula reindeer industry on the regional economy, baseline case (2000 dollars).......................................................82 Table 12. Estimated per annum impact of caribou on the Seward Peninsula regional economy, through decline of the local reindeer industry (2000 dollars)..................86 viii Table 13. Estimated per annum and 10-year period total economic impact of caribou on the reindeer industry under each scenario showing the industry at different scales (2000 dollars)............................................................................................................88 Table 14. Estimated per annum impact of caribou on the Seward Peninsula regional economy, through decline of the local reindeer industry (2000 dollars)..................94 Table 15. Estimated 10-year period total economic impact of caribou on the Seward Peninsula regional economy through decline of the local reindeer industry (2000 dollars)......................................................................................................................95 ix Acknowledgements I would like to express my gratitude to the National Science Foundation for supporting this work through the interdisciplinary research project Reindeer Herding in Transition: Feedbacks between Climate, Caribou, and Local Communities in Northwest Alaska. I wish to thank Kawerak Reindeer Herders Association members and Director, Rose Fosdick, for helping me to construct an economic baseline for the Seward Peninsula reindeer industry. Finally, I would like to recognize the logistical support and data contributions provided by University of Alaska Reindeer Research Program staff and Program Manager, Greg Finstad.