Fuels Planning: Science Synthesis and

Integration

Economic Uses Fact Sheet: 3

Economic Impacts of Fuel Treatments

United States

Department

of Agriculture

Forest Service

Rocky Mountain

Research Station

Research Note

RMRS-RN-20-3-WWW

September 2004

Fuel Treatments and Communities

With increased interest in reducing hazardous fuels in dry inland forests of the

American West, agencies and the public will want to know the economic impacts of fuel reduction treatments. Fuel planners may find, however, that those

impacts are difficult to predict. The costs of fuel treatments will vary depending

on the type of treatment, climate, and local site conditions. The economic benefits from fuel treatments will vary depending on whether or not wood products

will come from the treatments (and market conditions for those products), how

many jobs the treatment will create, the income generated from the treatment

activities, and the amount of local spending associated with treatment activities.

Federal money for local fuel treatments infuses the local economy with outside support. Impacts to local economies also depend on the timeframe of activitiesóa sustained period of economically beneficial fuel reduction treatments would yield a

sustained source of income for communities (Flora 2003). Because economic impacts are difficult to predict, managers may find economic forecasting tools helpful

when making decisions in their particular forests.

A Tool for Evaluating Economic Impacts

Agency land managers faced with an over-abundance of hazardous

fuels will want to know how treatments might affect the local economy

(photo courtesy of USDA Forest Service).

The economic impact tool interacts with My Fuel Treatment Planner, an MS Excelbased treatment cost calculator (see fact sheet 4, RMRS-RN-20-4), prompting

the user with simple forms for a minimal set of information about the projectís

location, the total cost and mix of the activities applied, and the products produced, if any. Estimates of the jobs and income that may result are provided for

the standard, multicounty Component Economic Area (Johnson 1995) in which

the project is located, anywhere in the United States. My Fuel Treatment Planner

Understanding how fuel

reduction treatments may

affect local jobs and incomes is often a challenge

to field-level personnel

focused on the resource

management aspects of

the treatments. Economists at the USDA Forest

Service Inventory &

Monitoring Institute (IMI)

have developed a rapid assessment tool to estimate

the job and income effects

of fuel reduction projects.

Economics Team Co-Leads:

Roger Fight

Jamie Barbour

USDA Forest Service

Pacific Northwest Research Station

620 SW Main Street, Suite 400

Portland, OR 97205

Fuels planning: Science synthesis and integration, an interagency research/management partnership to support the Ten-Year

Fire Plan, led by Russell T. Graham, RMRS,

and Sarah M. McCaffrey, NCRS.

Synthesizing

Scientific Information

for Fire and Fuels

Project Managers

Pacific Northwest

Research Station

The information about the economic impact tool was provided

by Greg Alward, Mike Niccolucci,

and Doug Smith, USDA Forest

Inventory and Monitoring Institute, Fort Collins, Colorado.
The Fuels Planning fact sheets are based on preliminary findings. Information from fact sheets will be synthesized in an upcoming publication.

was designed to address treatment costs, potential for

offsetting costs with product utilization, the effect of

treatment on surface fuel loads, and the economic impact at the time of fuel treatment. Longer term economic impacts could occur if fuel treatment affects other

forest uses such as recreation. Current research on the

effect of thinning and prescribed fire treatments on recreation and other forest uses is too limited to provide

the basis for modeling these effects.

Information needed to make estimates of job and income effects for Component Economic Areas were assembled by IMI economists using standard IMPLAN economic analysis protocols (Alward and others 2003) and

data about four of the most common fuel treatments and

possible forest products produced by these activities.

With the economic impact tool, a component of My Fuel Treatment Planner, you have the option of producing a standard Microsoft Word report displaying the estimated economic impacts that can be directly

included in environmental analysis documents being prepared for a project.

References

Alward, G. S.; Arnold, R.; Niccolucci, M.; Winter, S. A.

2003. Economic significance of the USDA Forest Service Strategic Plan (2000 Revision): programmatic methods and evaluation. USDA Forest Service, Inventory and

Monitoring Institute, Report No. 6, May, 2003.

Flora, D. F. 2003. Forest economics research at the Pacific Northwest Research Station, to 2000. Gen. Tech.

Rep. PNW-GTR-562. Portland, OR: USDA Forest Service, Pacific Northwest Research Station. 207 p.

Johnson, K. P. 1995. Redefinition of the BEA Economic

Areas. Survey of Current Business, Vol. 75, No. 2.

Economics Team Fact Sheets

Look for fact sheet topics from the Economics Team including prescribed fire costs, harvesting, log hauling, NEPA and other regulations, wood utilization, economic impacts on communities, markets for wood, and harvest equipment requirements.

Fuels Planning: Synthesis and Integration

This fact sheet is one in a series being produced as part of a larger

project supported by the USDA Forest Service to synthesize new

knowledge and information relevant to fire and fuels management.

Fact sheets address topics related to stand structure, environmental

impacts, economics, and human responses to these factors. Information in the fact sheets is targeted for the dry forests of the Inland

West, but is often applicable across broad regions of the country.

For more information, please visit our Web site at:

www.fs.fed.us/fire/tech_transfer/synthesis/synthesis_index