DePaul University recently studied the expected costs of closing the Illinois locks leading into Lake Michigan, reported here. Closing the locks would cost the Chicago area around 70 million dollars per year. In addition to hurting shipping traffic, the recreational boating industry would be hurt; boats stored in shipyards along the river would not be able to be placed into lake without ground transportation to the lake, a very expensive ordeal. Of course, if the carp were to proliferate in the lake, the multi-million dollar sport fishing industry would be finished in addition to the natural ecosystem of the lake being destroyed.
The Supreme Court has been asked to intervene through lawsuits brought by several states that would be affected if the Asian Carp were allowed to invade Lake Michigan. The latest renewed motion for preliminary injunction can be seen here. This is a very interesting and troublesome topic. How does the federal government respect state sovereignty when leaving a state to do what it pleases could affect so many other states?
Lake Michigan is a conduit through which many of these issues flow. For example, Chicago has been upset with the amount and quality of sewage that Detroit dumps into the lake. Indiana was placed in the spotlight when one of its BP refineries tried to get permission to dump more poison into the lake. Each one of these problems imposes huge negative externalities on other states. The problem is that many of the decisions are made based on costs and benefits to the state in question without regard to the costs on other states that depend on the lake.
While federal intervention seems necessary given the bickering and defensiveness that has plagued this carp issue, it may only make things worse by not selecting the best solution for all of the states. The states understand the issue more intimately than the federal government could, but pride and political posturing get in the way of any progress. Hopefully, the states involved in the carp issue can come to an agreement that is best for all and that takes into consideration the externalities imposed on non-market participants. Until then, the Supreme Court of the United States will continue to be pestered into solving this problem.