The lousy economics of Bush's new forest policy.

The conventional wisdom debunked.
Dec. 4 2002 11:06 AM

Dead Wood

The lousy economics of Bush's new forest policy.

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One day before Thanksgiving, when the only environmental issue anyone was paying attention to was turkey depopulation, the Bush administration quietly declared an enormous change in how the government will manage its 192 million acres of national forests. Billed as a way to "streamline" planning in the forests, the Bush proposal would, among other things:

  • Allow local forest managers to decide if logging and grazing deserve as much weight as protecting animals or birds;
  • drop a 25-year-old requirement that forest-management plans contain detailed environmental impact statements;
  • set the stage for reducing requirements that the Forest Service protect plant and animal diversity in the forests.

It's perhaps true, as Forest Service officials claim, that current forest-management rules are too complex and costly to administer. But if so, it's equally true that the proposed rule changes are essentially an effort to open national forests to more logging than they have seen in years.

Among those with fingerprints on the proposal is Mark Rey, the undersecretary of agriculture who runs the Forest Service. Rey was a longtime foe of logging regulations on national forests, primarily as vice president of the American Forest and Paper Association, an industry trade group that bitterly fought logging cutbacks during the early '90s. "This is a timber industry proposal, pure and simple," Charles Wilkinson, a University of Colorado law professor, told the Denver Post.

But the real problem with the logging changes is not that they are pro-timber industry, it's that they are economic nonsense. It's curious that an administration that is so business-friendly would take measures that actually would hurt business, let alone dozens of small towns across the West. But that's exactly what would happen.

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For starters, the last thing the United States needs right now is more lumber. Despite the continued housing boom, lumber itself is as cheap as it has ever been. Two years ago, for instance, the lumber required to build a new home might have cost about $12,000. Today that same lumber package would run about $7,500.

Despite a tariff on Canadian lumber, wood from north of the border is inexpensive and plentiful. The continued strength of the U.S. dollar, meanwhile, has encouraged timber imports from Europe. At the same time, the strong dollar has discouraged exports to Japan, which once bought millions of board feet per year taken from private U.S. timberlands (exports of logs from national forests are banned). That privately owned timber also is finding its way onto the U.S. market, adding to the glut.

And on a per-capita basis, Americans simply use less wood than they once did. Today new homes are built with big pieces of wood made by gluing together little pieces of wood, a process that saves big, mature trees from the chainsaw. Some "wood" isn't even wood—many homes now have siding made with a mix of concrete and sawdust. In many new homes, the only traditional sawn lumber may be the cheap 2-by-4 studs used for framing, and sometimes steel studs replace even those.

More important, the proposals represent an archaic understanding of the Western economy. The policy is designed to help a West traumatized by the spotted owl and salmon logging cutbacks of the '90s. But this West doesn't need the help.

Logging is an extractive industry. Even during boom times, lumber towns never really prospered. They didn't attract other businesses or investment because they were designed to be more or less temporary, since they were mowing down their chief resource: trees.

For many parts of the West, it was only when logging was curtailed in the late '80s and early '90s that things picked up. That's because standing trees—which attract tourists, well-heeled fly-fishers, and retirees looking for a home in the country—are worth more than cut trees. Thomas Power, an economist with the University of Montana, says that by the late '90s, eight of 10 national forests in Montana generated three times as much income from tourism and recreation as they did from cutting down trees.

Typical of the West's new economic order are companies such as North Fork Anglers, founded by fishing guide Tim Wade in Cody, Wyo., in 1984. Today the shop employs 15 retail employees and guides and hosts as many as 400 fishers a year who pay $150 a day for the privilege of wetting a line, fill Cody's hotel rooms and restaurants, and add to the coffers of United and Delta airlines. Moreover, Wade's company is theoretically permanent. It is not destroying the rivers. Loggers, by contrast, are paid to decimate the very thing that keeps them employed.

But perhaps the Bush administration's rule changes really are not about economics. In conservative circles logging is a bellwether issue, a club with which to beat Bill Clinton, the Sierra Club, and the heavy hand of government in general. Logging is a kind of religious issue: Conservatives take it on faith that cutting down trees is good for business. But the economics of the West during the past 20 years argues that it isn't.

Douglas Gantenbein is the Seattle correspondent for the Economist.