CHAPTER 5 

Economic Evaluation 

of the Preliminary 

Draft EIS Alternatives 

Richard W. Haynes 

Amy L. Home 

Nicholas E. Reyna 
732 Economic

Richard W. Haynes and Amy L. Home are research foresters with the USDA Forest Service, Pacific

Northwest Research Station, Portland, Oregon 97208.

Nicholas E. Reyna is a forester with the USDA Forest Service, Pacific Northwest Region, Walla Walla,

Washington 99362.
Economic Overview 

Evaluation of the Alternatives 

Economic Activity 

Direct jobs 

Counties 

Economic resiliency 

Economic Efficiency 

Equity 

Summary 

Literature Cited 

TABLE OF 

CONTENTS 

735 

737 

737 

737 

743 

745 

749 

755 

755 

757 

Economic 
734 Economic
Economic Overview

^^•••••••••••^•••^•••^•^•••{•••••••••••••••••••••^^^S^V^*

This economic evaluation of the preliminary draft Employment growth in the Basin has averaged 2

Environmental Impact Statement (EIS) alternatives percent per year for the past two decades.

is based on data, methods, and analysis reported in _, . .

the Economic Assessment chapter (Haynes and

 T

.

he

 Basm supports a diversity of lifestyles but

Home, in press) of &e Assessment of Ecosystem *f

 based

 on agriculture are a significantly

Components in the Interior Columbia Basin and

 hlSher

 Proportion than in the nation. Farm ownPortions of the Klamath and Great Basins (Quigley «

s

' .fTM0'

 rural

 farm-

town faTM 'f5

'

 and

 ranch

j A u TL• j • i T L • -u ramilies represent 19 percent or all households in

a nd Arbelbide, in press). It begins with a summary in- j • i -, -i

r r j- L u • j- the Basin, compared with 2 percent in the nation

of our findings about the current economic condi- . . ' v . ,nn/^^\- i

r u n • i W7- u • u • (CJaritas Corporation 1994). 1 his supports the

tion or the Basin.1 we then examine the primary

 v

 . , , n • • i- i i j rr r L i • • perception that the Basin is more rural in characand secondary effects of each alternative using

 v \ i • • • TT • j o

r • j i i i r?ic ter than are other regions in the United States, measures of outputs provided by the EIS teams °

[animal unit months (AUMs), Recreation Oppor- An important determinant of recent economic

tunity Spectrum (ROS) acres, timber harvest, and growth in the Basin is population change. Between

unroaded areas].2 We identify effects on specific 1990 and 1994, 96 of the 100 counties increased

economic sectors for the Basin as a whole and for in population, reversing the trend of the 1980s

particular counties. Using the concept of economic (McCool and Haynes 1996). The fastest growing

resiliency, we discuss the impact of the alternatives economic sectors are services (including health,

against the backdrop of the changing Basin econo- business, education, and law), trade, FIRE

my. We then evaluate the effect of the alternatives (finance, insurance, and real estate), and transon efficient use of Federal land resources in which portation. Manufacturing (including timber, plyefficiency is defined as the benefits provided, not wood, and paper), farming, and especially the govcash flows. In the final section, we discuss the ernment sector continue to hold steady or to lose

effects of the alternatives on the distribution of jODS. These trends have been viewed by some as a

costs and benefits among the American people. general decoupling of rural economies from tradiTU r> • • i • • i • tional resource extraction and associated manufacThe Basin is currently enjoying robust economic . ...,„ . . ,. ,»„-. n

growth. Per capita income is growing faster than [urm8

 acfltles

 <Galston and Baehler 1995)' ^

the national rate in Idaho, Oregon, and Washing- ^tory and management challenges are increasingly

/u • \t \ r> i driven by population growth and its associated resiton (but not in Montana). Poverty rates are lower . i i i 11 i r i i-

, LTT-J C TT i dential developments and demand tor public serthan the United States average. Unemployment . „ . £ „ .„„. . _f r

rates in Idaho and Montana are lower than the ^ K

For the

 ^^f f»

 and BureaU

 °f

U.S. average. Earnings per job are increasing faster ^nd Management (BLM) the increase

than the U.S. average in all of the Basin states

 der!ces

 ,

adJa

f

 nt

,

to Fedfd lands elevates the costs

except Idaho (Haynes and Home, in press). Except

 and

 Polltlcal stakes of fire ^PP^ssion.

for Montana, the difference in per capita income This recent population growth is changing the

between metropolitan and non-metropolitan coun- economic character of the Basin by diversifying

ties is less than the average for the United States. its human capital3 and increasing its economic

'The Basin is defined as those portions of the Columbia River basin inside the United States east of the crest of the Cascades in

Oregon and Washington and those portions of the Klamath River basin and the Great Basin in Oregon.

2Unless otherwise noted output measures come from other staff areas and are described in project documents and science materials; on file with: U.S. Department of Agriculture, Forest Service, U.S. Department of Interior, Bureau of Land Management,

Interior Columbia Basin Ecosystem Management Project, 112 E. Poplar, Walla Walla, WA 99362.

'Economists consider capital to broadly include how new knowledge increases human ability to produce goods and services.

Economic 735
resiliency.4

 Twenty-one non-metropolitan counties recreational spending accrue mainly to private secwith significant recreation opportunities have very tor enterprises that provide food, lodging, equiphigh growth rates due to in-migration (Johnson ment, supplies, or outfitting/guiding services. Per

and Beale 1995). The six metropolitan counties acre value of recreation use in the Basin is highest

have more moderate growth rates. The 77 coun- on the eastern slope of the Cascade Mountains—

ties that are in neither the recreation, nor the the area closest to the population centers in westurban category are experiencing slower rates of ern Oregon and Washington. The overall condigrowth. The 21 recreation counties account for 24 tion of scenery in the Basin contributes to the

percent of the total population increase in the quality of recreational experiences; five Ecological

Basin and 29 percent of the total net migration Reporting Units (ERUs) (Northern Great Basin,

(McCool and others, in press). Some rural coun- Owyhee Uplands, Upper Snake, Snake Headties are growing rapidly because they attract waters, and Central Idaho Mountains) may be the

retirees and people whose lifestyles appear to be most visually intact, unmodified areas in the conmore oriented toward the natural environment, tiguous United States (McCool and others, in

who have occupations related to natural resources, press).

or who enjoy recreation activities. , Livestock grazing has been a longstanding use or

Of the Federal land uses in the Basin that we Federal lands in the region. In the past two

could evaluate, recreation has the highest value, decades, ranching industry consolidations and a

followed by timber, and then range. Fifteen per- long-term shift to grain-fed beef have reduced the

cent of employment in the Basin is attributable to number of producers in the Basin. About 21,000

recreation and FS- and BLM-administered lands people are currently employed in ranching operasupply 80 percent of the recreation net economic tions. Ranchers in the Basin rely on Federal lands

benefit (Haynes and Home, in press). Traditional for 7 percent of their annual forage needs,

natural-resources jobs (mining, wood products although the reliance on Federal forage is higher

manufacturing, and ranching) currently account during the spring and summer seasons,

for 4 percent of employment in the Basin. Further _ , ... . /- •

detail on each of these sectors is described in the Employment in mining and manufacturing are

following sections. less important in the Basin than for the nation as

a whole. Timber manufacturing accounts for

Recreation supports more than 200,000 jobs in roughly 40,000 jobs or approximately 20 percent

the Basin and provides approximately $1.2 billion of the manufacturing jobs in the Basin. It is most

in economic benefits when measured using will- important in the eastern Oregon economy as well

ingness to pay (Haynes and Home, in press). as locally significant in a number of small cornHunting, motor viewing, and day use are the munities in northern and central Idaho, northrecreational activities that support the greatest eastern Washington, and western Montana. In

number of jobs, while recreational fishing, day 1991, the Basin accounted for 12 percent of softuse, winter sports, hunting, and camping provide wood harvest in the United States. That year, the

the greatest value in terms of willingness to pay National Forests provided 46 percent of the tim-

(Haynes and Home, in press). Although these ber harvest in the Basin (the contribution of

economic effects are considerable, the Federal BLM-administered lands to timber harvest in the

Government and other local governments in the Basin was negligible).

Basin receive little financial benefit for providing

recreational experiences. The financial benefits of

4Resiliency is defined as adaptability to change (Haynes and others 1996). Economic systems with high resiliency are those capable of absorbing external shocks, such as a recession, and rebounding in terms of system indicators, such as total employment and

per capita income.

?3S Economic
EVSlllfltiOll Of ttlG accompany these higher levels would also affect

AltArnativeS recreation activity and unroaded areas.

This evaluation of the seven preliminary draft EIS Economic Activity

alternatives answers three questions which together constitute a comprehensive economic analysis

 The effects of the seven

 preliminary draft EIS

of the alternatives. The first question is "what alternatives on the regional economies of the

would be the effect of the alternatives on econom-

 Basm are subtle

-

 The

 alternatives affect 0.1 peric well-being in the Basin?" The traditional mea-

 cent of

 & Jobs m the Basm'

 or l

 -° Percent of

sure of effects on economic well-being is job

 those based on FS

~

 and

 BLM-admmistered lands,

impacts. This, however, is a poor proxy because it Differences in economic resiliency may be observfails to adequately consider the dynamic, temporal

 able durmg the first decade

 after implementation

dimension of economies. We attempt to incorpo-

 m 4 of the l °° counties in the Basin (Adams

rate this dimension using the measure of econom- County, Idaho; Lincoln County, Montana; and

ic resiliency. The second question is "what would

 Grant and Lake

 Counties, Oregon). However,

be the effect of the alternatives on economic effi-

 larger and more

 numerous differences might be

ciency, or the values provided to society by the observable over several decades, depending on

FS- and BLM-administered lands in the Basin?"

 which

 alternative is chosen. The question of the

Our answer provides a rough benefit-cost analysis

 imPacts on

 economic activity can be divided into

of the alternatives. The third, "what would be the

 three

 Parts: dlrect Job lmpacts; counties; and ecoeffect of the alternatives on equity, or the distribu-

 nomic

 resiliency.

tion of benefits throughout society?" addresses the Direct jobs—The alternatives will probably have

question of who gams and who loses. litde effect on the total number of jobs supported

Haynes and Home (in press) conducted analyses

 bY resources from BLM- and FS-administered

at three spatial scales: national, the study area (the

 lands

-

 In 199° there were L5

 million jobs in the

Basin), and two sets of subregions [ERUs for sum-

 Basin> and

 Jobs were expected to increase by

marizing ecosystem outputs, and Bureau of

 110'000 during the 1990s

 (Haynes and Home, in

Economic Analysis (BEA) areas5 for evaluating Press)-

 Of

 &*l-5 milhon'

 FS' and BLM-admmiseconomic activity]. We add a fourth spatial scale

 tered lands

 support roughly 240,000 jobs, of which

in this analysis, the county, in order to identify

 94

 Percent is in recreation, 5 percent in timber,

more local impacts under the preliminary draft and

 l Percent m range

-

 The

 number of jobs associEIS alternatives. For reference, map 5.1 shows the

 ated with the various

 alternatives is within 1 percounties found within the Basin. This evaluation

 cem of

 &e number expected under continuation of

considers results of the first decade of implemen-

 current

 P[ans (Alternative 1). The main effect of

tation (1995-2005) because it is the standard ^ alternatives would be to switch relatively few

timeframe for evaluating EIS alternatives, and Jobs between those m the range and timber sectors,

because we have greater confidence in our projec-

 to those

 supported by recreation activity,

tions over a 10-year period than for longer time Qur focus on employment is as a proxy for ecospans. We considered Alternative 2 closest to con- nomic well_being. It also does not recognize the

tinuation of current activity since it set harvest at potential for timber-sector jobs to have higher

1993 levels, and maintained existing road net- incomes than jobs in the recreation sector. Often

works and grazing levels expected under current dmber jobs are mought to have a more positive

policy. Alternatives 1 and 5 assumed higher levels impact on local economies man recreation jobs

of timber harvest. The road building that would because they have higher income muitipliers. But

'These are multi-county areas based on commuting patterns defined by the Bureau of Economic Analysis (BEA).

Economic 73?
this approach is static, assuming no change in the per AUM. The midpoints of reductions in Federal

economy other than that affected by policy. This AUMs for each alternative were:6

ignores the reality that economies are dynamic ., . . T TM, TM i j • • • i • i j • Alternatives AUMs Reduction

and interactions at regional, national, and mternational scales may overwhelm or offset any impact Thousands Percent

of FS and BLM decisions. Because of this, we are i 272 9.5

more concerned about the effect of FS and BLM 2 315 11

decisions on the ability of an economy to adapt to 3 287 10

change. Further, a complete comparison of the 4 315 11

economic development impacts of recreation ver- 5 100 3.5

sus manufacturing requires consideration of more 6 315 11

than income multipliers. This is because personal 7 i ,433 50

income is derived from investments and transfers

as well as from earned income. In recreation

 The

 number of AUMs after a decade was then

counties, per capita income is higher than in man- determined by subtracting their reductions from

ufacturing counties in part because they attract

 our most recent

 number of AUMs on BLM- and

people who derive a greater proportion of their FS-administered lands in the Basin (2.86 million

income from non-salary sources (Haynes and

 AUMs in 19937

)- The projected number of AUMs

Home, in press)

 was

 apportioned between the two EIS planning

areas and federal agencies according to the 1993

Range jobs—The alternatives would probably distribution:

have relatively small effects on ranching jobs over

the next decade because FS- and BLM-adminis-

 UCRB

 EEIS Total

tered lands provide only 7 percent of the forage - Millions

for cattle and sheep in the Basin. Small reductions p$ 101 029 1.30

from current levels are expected even with no BLM 1.10 0.46 1.56

change in policy (Alternative 2) reflecting recent Total 2.11 0.75 2.86

unrelated changes in management. For the Basin

as a whole, Alternatives 3, 4, and 6 do not affect The number of jobs per AUM was calculated to

range jobs relative to Alternative 2. Alternative 5 be 0.00036. This was determined by multiplying

may increase range jobs by 100, while Alternative an earlier estimate of 0.0003 (Haynes and others

7 may decrease range jobs by 400. In the EEIS, 1992) by 1.2 to account for the seasonal pattern

Alternative 5 may increase range jobs by 100, and of Federal allotments. The factor of 1.2 was

Alternative 7 may decrease range jobs by 100. In derived by assuming: a constant herd size, that

the UCRB, no effect on range jobs is foreseen for Federal grazing reductions during spring and sumany Alternative except 7 which may decrease

 mer grazing seasons could be offset from other

range jobs by 300. feed sources by 10 percent, and a fixed seasonal

pattern for Federal grazing allotments.8 This

Range jobs were calculated by multiplying the means tnat there would be no forage substitution

number of animal unit months (AUMs) after 10 for 2Q percent of the AUMs, and there would be a

years under each alternative by the number of jobs consequent 20 percent increase in the effect on

'Thomas G. Miles and Michael G. Karl developed these estimates. Their assumptions and methods are documented in a February

26, 1996 memo. On file with: U.S. Department of Agriculture, Forest Service, U.S. Department of Interior, Bureau of Land

Management, Interior Columbia Basin Ecosystem Management Project, 112 E. Poplar, Walla Walla, WA 99362.

7Data on file with: the U.S. Department of Agriculture, Forest Service, Forestry Sciences Laboratory, 1221 SW Yamhill, PO Box

3890, Portland, OR 97208.

!The seasonal distribution of public grazing allotments for Oregon, Washington, Idaho, and Montana average 34, 33, 23, and 10

percent in the spring, summer, fall, and winter seasons (see table 6.15 in Haynes and Home, in press).

7-$8 Economic
jobs of a reduction in Federal AUMs. We also obtained from Greg Alward (see appendix 6-B in

assumed that jobs per AUM would remain con- Haynes and Home, in press). These were computstant over the next decade. ed from direct expenditures for items such as

„ ..,_, . . . food, lodging, transportation, fishing guides, and

Recreation jobs-The alternatives may have a $ki uft dcke * These f£ coefficients are

more substantial and positive effect on jobs associ- he sm^. fof exam k> 1)000 ; ^

ated with recreation activity over the next decade. d [n ^ Roise B£A ^ ^ Mf Q( Qne

Alternatives 3, 4, 6, and 7 would have no effect job Jn SQme of ^ Basm> however> ^

relative to Alternative 2. Alternative 1 would nimde of recreation activity ates a substantia]

decrease jobs by 8,000, 75 percent of which would number of. bs Jo s[ ufy ^ calculatioil) we

occur in the UCRB planning area (see table 5.1). assumed ^ ditures that do not occur in

The 6 600 decrease in recreation jobs associated ^ same B£A afea ^ recreation acdvides will off.

with Alternative 5 would be more modest, 80 per- i L

c L- L u • L TT/-DD i • set each other,

cent or which would occur in the UCKo planning

area. These near-term decreases would result We can infer a barrier to implementation from

because Alternatives 1 and 5 assume more road our analysis. Recreation and unroaded areas are

construction than Alternative 2. As the population highly valuable outputs from FS- and BLMbecomes more elderly in the future, lower road administered lands in the Basin (Haynes and

densities may decrease recreation activity. Home, in press; also see the following "Economic

_. . i. i . Efficiency" section of this chapter). If the chosen

Recreation jobs were calculated by multiplying alternative is perceived as a threat to the recreation

estimates of recreation activity after 10 years opportunities and unroaded areas provided by

under each alternative by the number of jobs sup- these lands ive bUc inion inhibk

ported by that activity. Recreation activity was implementation,

determined rrom estimates or the number or acres

in each Recreation Opportunity Spectrum9 class For two reasons we are less certain about the

under each alternative and population projections absolute magnitude of recreation jobs illustrated

for Idaho, Montana, Nevada, Oregon, Utah, in our analysis results than the relative differences

Washington, and Wyoming in the year 2005 between alternatives. The first reason is that we

(U.S. Department of Commerce 1992). Alterna- believe that more acres would shift from roaded

tives 2, 3, 4, 6, and 7 would maintain the current natural to primitive/semi-primitive settings than

distribution of ROS acres. Roaded natural acres are shown in this analysis. These numbers were

would increase under Alternative 5 and even more derived by assuming no decrease in roaded natural

so under Alternative 1. With these inputs of pop- settings from current conditions under Alternaulation and ROS acres, we used a recreation tives 2, 3, 4, 6, and 7, minor increases under

model described in Haynes and Home (in press), Alternative 5, and the largest increases under the

to calculate the number of activity days occurring continuation of current management. Yet,

on FS- and BLM-administered lands in each ERU National Forests are currently implementing polifor each of the 12 recreation activities. These cies to close roads and there are concerns about

numbers were then apportioned from ERUs to maintaining the existing road network given limitBEA areas. ed budgets. The second reason is that we think

. „ . i r the recreation response coefficients probably overThe recreation response coefficients, or number of ^^ ^ number of jobs assodaxed with recre.

jobs per recreation activity day for each of 12 ation aaivity

recreation activities for each BEA area, were

There were three ROS classes used: natural, primitive/semi-primitive, and rural/urban. The FS- and BLM-administered lands in

the Basin were divided among the three classes as 59, 40, and 1 percent, respectively.

Economic 739
Map 5.1 — Map of the counties found within the Basin.

740 Economic

u

1 li Si

I i§ a. " I3 i H 1H

U 09 U •<

^<:^

K

.2W.

i

u
Table 5.1— Employment levels based on Federal lands in the Basin1

 by EIS planning area (EEIS, UCRB),

and employment sectors.

AreaVSectors 1 g 3 AHemadve &

Thousands of jobs

EEIS

Range 0.2 0.2 0.2 0.2 0.3 0.2 0.1

Recreation 105.9 107.9 107.9 107.9 106.6 107.9 107.9

Timber (SIC 24)3 13.1 6.1 5.6 5.9 7J 4.8 2.4

Total EEIS 119.2 114.2 113.7 114 114 112.9 110.4

UCRB

Range 0.7 0.7 0.7 0.7 0.7 0.7 0.4

Recreation 113.4 119.3 119.3 119.3 119.3 119.3 119.3

Timber (SIC 24)3 8.6 6.4 8.7 7.3 10.8 47 3.4

Total UCRB 122.7 126.4 128.7 127.3 130.8 124.7 123.1

Basin

Range 0.9 0.9 0.9 0.9 1.0 0.9 0.5

Recreation 219.3 227.3 227.3 227.3 225.9 227.3 227.3

Timber (SIC 24)3 21.7 12.5 14.3 13.2 17.9 9.5 5.8

Timber (SIC 08)4 0.2 0.1 0.1 0.1 0.1 OJ 0

Total Basin 242.1 240.8 242.6 241.5 244.9 237.8 233.6

'The Basin is defined as those portions of the Columbia River basin inside the United States east of the crest of the Cascades and those portions of

the Klamath River basin and the Great Basin in Oregon.

2Area: EEIS - Eastern Oregon and Washington planning area; UCRB - Upper Columbia River Basin planning area.

3

SIC 24 Employment computed using midpoint values for timber harvest from the EIS activity tables.

"SIC 08 Number of forestry workers.

Timber jobs—The effects on timber jobs over however, where only Alternatives 6 and 7 would

the next decade would be of similar magnitude as have negative impacts on employment. Alternarecreation but would vary more widely. Using tives 3, 4, and 5 would have positive impacts on

Alternative 2 as an approximation of current bar- timber employment relative to the 1993 employvest, estimates range from a loss of 6,700 jobs to a ment levels.

gain of 5,400 jobs depending on the alternative ~. , . , , . . , fur c i \ T-L• u • i u 1 imber jobs were calculated using the same

(table 5.1). 1 his approach estimates only the / ,. „„,,._, ,,nr.~?, i- i • j. ,

 rr

 rr ,, ' approach used in FEMAT (1993) by multiplying

direct employment effects, and does not assume \ • c • L i i \ \ r

rr • • • i r c j i the estimates or timber harvest by the number or

offsetting increases in harvest from non-rederal . , . . . . r ,„/ . „.

, , T ° , CCTC i n i • )°bs per thousand board reet. We assumed no orrlands. In the hbli planning area, all alternatives ' .

 r

 . . . r „ . . / I-A I • c\ i j j j setting increases in harvests from non-federal

(except tor Alternative 5) would reduce wood , ,

 D

T . . . r . . . j

r

 , iii - u lands. Initial estimates o r th e average annual timproducts employment levels relative to those , , r r LT -nT T • JTI

 j j A i • i T-U • u ber harvest ror each hRU were pro ected ror the

expected under Alternative 2. 1 he situation in the , . . , _, . i . ,,. „ . i,__ . ... • j-rr next decade using the Columbia River Basin UCRB planning area would be quite dirrerent °

Economic 741
Succession Model (CRBSUM).10

 We used the and 15 percent of the potential sale volume,

midpoints of the Federal timber harvests estimat- Consideration may need to be given to other, less

ed by the EIS team (based on the data in table costly, logging systems.

5.2) for each alternative. , , . . . . , , ,,

A second reason that this timber may not be sold

The direct employment multiplier, or number of is because of low average harvest diameters. We

jobs per thousand board feet, was determined by examined this by subtracting precommercial thindividing current employment in the wood and nings from total harvest (because these trees are

forest products industry [Standard Industrial not taken to mills) and calculating the diameter at

Code (SIC) 24] by current timber harvest. The breast height (DBH) of the remainder. The resultnumber of forestry workers (SIC 08) required for ing average harvest diameters (in inches) are:

the precommercial thinning assumed in the .

CRBSUM model runs was estimated using 30 Alternative

jobs pe r $1 million of labor expenditures.11 As in 123456 7

the FEMAT approach, we assumed no job EEIS 8.9 9.3 9.1 9.2 9.1 9.2 NA

changes for the pulp and paper industry (SIC 26) UCRB 8.8 9.0 9.3 9.3 9.1 9.4 NA

because this sector would not be directly affected

by change in timber harvest from FS- and BLM-

 Given these

 diameters, many sales will not meet

administered lands current standards for economic viability in which

sales must have at least 40 percent of their volume

To put these timber job impacts in perspective, it in sawtimber (12 inches DBH or greater), either

should be noted that the variability among alter- green or recently dead. Commercial viability of

natives is within the range of recent industry salvage sales is even more questionable because the

changes. Jobs attributable to total timber harvest value of dead sawtimber drops rapidly, especially

and from FS- and BLM-administered lands are for pines. Trees with diameters less than 8 inches

shown in the following tabulation: are likely to sell only during periods with high

PPJC- TIPRR °k*P Pfi

ces

 (such as in 1994 and early 1995).

Year Total Federal Total Federal Third, the costs of the management actions

^rT j assumed in various alternatives may be prohibi1 housands - . „. .... . ' • i • tive. 1 he precommercial thinning contained in

1982 16.5 7.4 18.2 5.7 the CRBSUM model runs are extremely costly.

1986 20.5 12.1 21.2 7.8 Assuming $110 per acre, the annual costs of pre10Oft *") ^l 1 1 1 Cl O1Q 77 o L ' L ijjv Z3.i 11.3 zi.o /./ commercial thinning for the alternatives are

1993 2L2 7

-

5 2LO 5

-

6

 $7.29, $2.98, $4.76, $4.86, $4.81, $4.11, and

For several reasons, we are not sure that the tim- $0-06 millions of dollars, respectively. Alternative

her harvest levels estimated for the preliminary

 l W(>uld cost $72.9 million for the first decade,

draft EIS alternatives will be realized. First, some Managers should not assume that rising stumpage

of the timber harvest projected by CRBSUM prices will [ncK3se revenues sufficiently to cover

assumed helicopter logging that at current the costs of such management actions. We do not

(Spring 1996) prices and costs will not likely be ^ the rapid stumpage price increases of the

sold. This volume could amount to between 9 early 1990s to continue. R^h^ for the next few

'"Steve Rheinberger developed a PARADOX database from volume and stand information sampled from selected CRBSUM pixels

throughout the forested areas of the Basin. His assumptions are documented in reports dated November 6, 1995 and March 3,

1996. On file with: U.S. Department of Agriculture, Forest Service, U.S. Department of Interior, Bureau of Land Management,

Interior Columbia Basin Ecosystem Management Project, 112 E. Poplar, Walla Walla, WA 99362.

"Total expenditures were reduced by 20 percent for non-labor costs.

742 Economic
years prices are expected to increase by 1 to 2 Effects—Using assumptions described above, we

percent per year (in real terms) (Haynes and found that 39 counties may be affected by federal

others 1995). Given the difficulty that the FS land management actions. Ten of these counties

and BLM had selling timber early in 1996, may be affected by decisions regarding grazing on

agency revenue may be difficult to maintain FS- and BLM-administered lands (table 5.3).

through timber sales. Given that a maximum difference of 500 range

f* . _, , . , jobs across the entire Basin may result from the

(Bounties—1 he second question concerning the , . ... 1-11 1

• • c i alternatives, potential impacts are not likely to be

impacts on economic activity focuses on the • -c u • c i. m „? r , • r" i i i i • significant except to the economies or the 10

effects of changes in Federal land management in ° . ,.

 r T-L m • L

.° . , T, . „ . . ° , counties reliant on range. Ihese 10 counties share

various counties in the Basin, hstimatmg the eco- . . • ° . . T • ,. .

, ., . ,.°. some interesting characteristics. In addition to

nomic impacts associated with the preliminary ... . ° _ . . - . .

, c „

r

. .. . -L their reliance o n Federal forage, they ar e sparsely

draft F,1J> alternatives is only one step in the i j u • i • j •

~. ; . , \[. . , populated, having an average population density

process. 1 he next step involves identifying where

 r

r

, _ , ° M n n • i • i

, . -1 1 i i o r 1. 7 people pe r square mile. Reflecting higher

these impacts might be concentrated, so that r , fr • i TT/^DT> i .

n i rr • r -r- Federal rorage use in the UCRB planning area,

eventually the effectiveness or specific actions to „ c , n ° . -IT T/^T. r>

. , i T" • i T i o out or 10 range counties are in the UCRB area, mitigate impacts can be assessed, lo identity the ^, . j-rr L i i • r • r i t ,--> 1nere are

 two important differences between these

location or impacts, we focused on the 63 coun- r. ,

r

 ,c ,, „

, -n . , IT- • n i counties. First, three counties (oublette County, ties in the Basin that the Economic Research ,v, . , T ,. \\r

\\ /^ • T j L N ,, . , i -r- i «T- i i i i" • Wyoming; and Lemhi and Valley Counties, Idaho)

service has classihed as Federal land—meaning , ?. , , f ... . ...

, _ _ r i • • j i have medium levels or economic resiliency, while

at least 33 percent or their area is managed by , , . , , :,.

r

 , ,

 r

 . i • r r the other counties have low economic resiliency,

federal agencies. We used information from ~, , . ,.cc . , , c /

T T ITT /• s • j -^ i The second important difference is that 4 of these Hayne 1 s and Home (in press) to identity those . _ . i r -r j

 . . .., . r. . i • i T-O 10 range counties are also classified as recreation counties in which activities associated with Fb . ,,,,, , T , . ,-, . T, , ,

, „,. , . . . counties (Valley and Lemni Counties, Idaho; and

and BLM raneee , recreation, or timber outputs are c , , , ~ ^ w, • \ r\c \

 r i r, • Sublette and leton Counties, Wyoming). Of these

important components of the Basin economy. . , T „ ,v/ . °, ,

„

 r

 . i- T- j i i • counties, only leton County, Wyoming has low Counties reliant on Federal range were those in . ... °

, . , , , _ r- i • i i economic resiliency,

which at least 12 percent of total agriculture sales

were dependent on forage from Federal lands.12 For the 21 recreation counties, jobs associated

For recreation, we used those counties within the with recreation activity in 8 may decrease under

Basin identified by Johnson and Beale (1995) as Alternative 1 compared with Alternative 2 (table

having a significant component of the economy 5.4). This is because of the assumption that this

associated with recreation activity. We assumed alternative would result in less primitive and semithat impacts would be felt in recreation counties primitive acres than under Alternative 2.

within BEA areas where recreation jobs might Alternative 5 would result in more modest job

change by more than 4 percent. Changes experi- decreases, thus only five counties are identified as

enced at the BEA level are likely to be most pro- experiencing a negative impact (Bonner, Kootenai,

nounced in recreation counties. We assumed Benewah, Elaine, and Camas Counties, Idaho).

Federal timber harvest levels could affect the We were unable to estimate job impacts in four

economies of counties in which the 29 isolated counties (Fremont and Sublette Counties,

timber-dependent communities are located (see Wyoming; and Humboldt and Elko Counties,

Haynes and Home, in press, for details). Nevada) because they lie outside the BEA areas,

the units for which we could calculate effects.

l2Originalty we used 10 percent, but in sorting the counties there was a natural break between 10 and 12 percent reliance. Three

counties (Ferry County, Washington; and Wallowa and Lake Counties, Oregon) were greater than 10 percent but fell just below

the break in data. Given the number of prospective job losses, we decided to focus on fewer rather than more counties.

Economic 743
Table 5.2 —Timber harvest in the Basin1

 by ecological reporting unit (ERU), EIS planning area (EEIS,

UCRB), preliminary draft EIS alternatives (1 through 6),2 and annual average 1995 to 2005.

Alternative

Area3

1 2 3 4 5 6

Million cubic feet

Northern Cascades 33.99 10.90 21.05 20.89 20.24 18.83

EEIS 33.99 10.90 21.05 20.89 20.24 18.83

UCRB 00000 0

Southern Cascades 48.22 35.18 22.00 21.70 25.06 21.42

EEIS 48.22 35.18 22.00 21.70 25.06 21.42

UCRB 00000 0

Upper Klamath 51.48 30.85 27.43 27.63 27.63 27.38

EEIS 51.48 30.85 27.43 27.63 27.63 27.38

UCRB 00000 0

Northern Great Basin 33.72 20.24 13.72 13.87 13.87 14.23

EEIS 33.72 20.24 13.72 13.87 13.87 14.23

UCRB 00000 0

Columbia Plateau 31.15 14.62 17.34 17.48 18.20 15.58

EEIS 25.17 12.81 14.78 14.90 15.57 13.22

UCRB 5.98 1.81 2.56 2.580 2.63 2.36

Blue Mountains 84.16 48.34 36.89 37.46 37.59 36.39

EEIS 82.48 47.96 36.04 36.54 36.76 35.67

UCRB 1.68 0.38 0.85 0.92 0.83 0.72

Northern Glaciated Mountains 179.12 113.95 94.23 67.90 129.36 62.10

EEIS 48.88 34.43 20.73 17.98 30.96 15.79

UCRB 130.24 79.52 73.50 49.92 98.40 46.31

Lower Clark Fork 150.67 61.80 96.77 63.60 105.79 60.92

EEIS 00000 0

UCRB 150.67 61.80 96.77 63.60 105.79 60.92

Upper Clark Fork 25.42 11.34 13.38 13.59 12.62 9.96

EEIS 00000 0

UCRB 25.42 11.34 13.38 13.59 12.62 9.96

Owyhee Uplands 0.55 0.37 0.39 0.39 0.39 0.35

EEIS 0.20 0.24 0.08 0.08 0.08 0.08

UCRB 0.35 0.13 0.31 0.31 0.31 0.27

Upper Snake 0.50 0.04 0.07 0.07 0.06 0.20

EEIS 00000 0

UCRB 0.50 0.04 0.07 0.07 0.06 0.20

Snake Headwaters 1.53 0.27 0.59 0.66 0.60 0.49

EEIS 00000 0

UCRB 1.53 0.27 0.59 0.66 0.60 0.49

Central Idaho Mountains 152.08 47.37 56.36 58.54 50.89 48.55

EEIS 0 0.11 0.03 0.03 0.03 0

UCRB 152.08 47.26 56.33 58.51 50.86 48.55

Total 792.59 395.27 400.22 343.78 442.30 316.40

EEIS 324.14 192.72 155.86 153.62 170.20 146.62

UCRB 468.45 202.55 244.36 190.16 272.10 169.78

1

 The Basin is defined as those portions of the Columbia River basin inside the United States east of the crest of the Cascades and those portions

of the Klamath River basin and the Great Basin in Oregon.

'Alternative 7 is not included in this table because there is no timber harvest activity under that alternative.

'Area: EEIS - Eastern Oregon and Washington planning area; UCRB - Upper Columbia River Basin planning area.

744 Economic
Table 5.3 — Economic evaluation of the preliminary draft EIS alternatives for their effects in 13 counties

reliant on Federal forage within the Basin.1

Alternative

County 1 2 3 4 5 6 7

Custer, I D 000000 -

Sublette, W Y 000000 -

Adams, I D 000000 -

Teton, W Y 000000 -

Harney, O R 000000 -

Lemhi, I D 000000 -

Valley, I D 000000 -

Camas, I D 000000 -

Grant, O R 000000 -

Owyhee, I D 000000 -

Wallowa, O R 000000 0

Ferry, W A 000000 0

Lake, O R 000000 0

0 = No Change; - = Negative Impact; + = Positive Impact

'The Basin is defined as those portions of the Columbia River basin inside the United States east of the crest of the Cascades and those portions of

the Klamath River basin and the Great Basin in Oregon.

Assumptions:

(1) The bulk of the impacts are assumed to affect counties in the UCRB, as 74% of the Federal AUMs are there.

(2) Alternative 1 represents a continuation of activity levels, standards, and guidelines from the late 1980s.

(3) Alternative 2 represents a continuation of current (1994, 1995) levels and interim directions.

As mentioned previously, four recreation counties timber reductions assumed under Alternatives 3

are also identified as reliant on Federal range. This and 5 suggest more mixed results, with an increase

suggests a possible complementary relation in timber jobs in one-third of die counties, all of

between ranching and recreation, as ranching can which are in the UCRB EIS area. We found

provide attractive settings in keeping widi the west- reduced impacts either because of minor changes

ern image. None of the identified timber-reliant in Federal timber harvest levels (for example, in

counties are also classified as recreation counties. the Northern Glaciated Mountains ERU) or

,„, . . .„ , , , . . , . , , „„ . , because some area mills have greater access to timWe identified 16 counties in which the 29 timber- bef from ^ timberlands

 6

dependent communities are located: 8 counties

have 1 timber-dependent community; 5 have 2 Economic resiliency—The third type of

dependent communities; 1 has 3 dependent com- impact is the effect of changes in Federal land

munities (Lincoln County, Montana); and, 2 have management on economic resiliency. In Haynes

4 dependent communities (Idaho County, Idaho; and Home (in press), economic resiliency is

and Grant County, Oregon). The economic defined in terms of economic diversity—the

impacts are shown by county in table 5.5. greater the diversity of economic sectors, the highAlternatives 4, 6, and 7 would have negative er the economic resiliency. Greg Alward computed

impacts on between 9 and 11 counties, most of the basic indexes from diversity of employment

which are in the EEIS area. The more modest data.13 We divided the diversity indices into three

13Personal communication. 1995. Greg Alward, Land Management Planning Staff, U.S. Forest Service, Fort Collins, CO. On file

with: U.S. Department of Agriculture, Forest Service, U.S. Department of Interior, Bureau of Land Management, Interior

Columbia Basin Ecosystem Management Project, 112 E. Poplar, Walla Walla, WA 99362.

Economic 74S
categories, such that a third of the counties in the Effects—In general, the economic resiliency of

United States fell into each group: low diversity the Basin is high relative to other parts of the

(0-70), medium diversity (71-77), and high diver- United States, although it varies across different

sity (78-100). Using the ranges established in this subregions in the Basin due in part to the size of

manner, we assigned ratings for the economic the area and diversity of existing biophysical conresiliency of each of the 100 counties in the Basin. ditions. In figure 5.1, the bar chart on the left

We examined economic resiliency of the Basin in shows economic resiliency weighted by populatwo ways: (1) weighted by its population, and (2) tion. It shows that 53 percent of the human popweighted by land area (see fig. 5.1). To judge the ulation lives in counties with high economic

effects of the preliminary draft EIS alternatives, resiliency. The bar chart on the right of figure 5.1

we used the population weighted measure of eco- shows resiliency weighted by area; it shows that 55

nomic resiliency because it varied directly with percent of the land area of the Basin has low ecopopulation levels and attributes. nomic resiliency. The 53 percent of the population that enjoys high economic resiliency lives on

15 percent of the Basin's area (fig. 5.1).

Table 5.4 — Economic evaluation of the preliminary draft EIS alternatives for their effects in counties

identified as recreation counties by Johnson and Beale (1995).

Alternative

County 1 2 3 4 5 6 7_

Bonner, I D -000-0 0

Kootenai, I D -000-0 0

Benewah, I D -000-0 0

Flathead, M T 000000 0

Teton, I D -00000 0

Lemhi, I D -00000 0

Teton, WY 0 0 0 0 0 0

Blaine, I D -000-0 0

Valley, I D 000000 0

Hood River, O R 000000 0

Deschutes, O R 000000 0

Wasco, O R 000000 0

Lewis an d Clark, M T 000000 0

Fremont, ID NA NA NA NA NA NA NA

Sublette, WY NA NA NA NA NA NA NA

Okanogan, W A 000000 0

Chelan, W A 000000 0

Custer, I D -00000 0

Elko, NV NA NA NA NA NA NA NA

Humboldt, NV NA NA NA NA NA NA NA

Camas, I D 0000-0 0

0 = No Change; - = Negative Impact; + = Positive Impact; NA = Not Available

Assumptions:

(1) If BEA area experiences +100 jobs, consider impact significant.

(2) Alternative 1 represents a continuation of activity levels, standards, and guidelines from the late 1980s.

(3) Alternative 2 represents a continuation of current (1994, 1995) levels and interim directions.

746 Economic
The employment diversity indexes for 1991 that since the mid 1980s. Furthermore, the economy

were used as measures of economic resiliency by of the Basin has shown resistance to national

BEA area are: recessions except when they greatly affect the agriBEA area Diversity index cultural sector.

Boise, ID 0.94 The highest diversity ratings are in BEA areas conButte, MT 0.88 taining metropolitan counties (for example, counIdaho Falls, ID 0.92 ties containing Boise, Idaho; and Spokane and

Missoula, MT 0.92 Richland, Pasco, Kennewick, Washington). The

Pendleton, OR 0.91 BEA economies in which employment associated

Redmond-Bend, OR 0.92 with recreation is substantial also have high diverSpokane, WA 0.94 sity, suggesting that they have high resilience to

Tri-Cities, WA 0.92 fluctuations in recreation activity (for example,

Twin Falls, ID 0.91 Idaho Falls, Idaho; Missoula, Montana; and

These results indicate that the regional economies Redmond-Bend, Oregon). The two BEA areas in

within the Basin are diverse (the highest possible

 whlch timber

 Pla>*

 a maJ°r r°le

 (Redmond-Bend

score is 1.0), and consequently have high econom-

 and

 Pendleton, Oregon) also have fairly drverse

ic resiliency. Little variation in economic diversity economies, suggesting that they are resistant to

is found across the Basin at the scale of BEA areas. fluctuations in that industry. The low diversity

These relatively high indexes reflect the conse-

 number for the Butte' Montana BEA area is misquence of rapid economic growth in the Basin

 leadmg be

r

cause dlversit

y ,

1S

 .calculated for only that

portion of the BEA area lying within the Basin.

Table 5.5 — Economic evaluation of the preliminary draft EIS alternatives for their effects in 16 counties

reliant on timber from Federal lands.

Alternative

County 1 2 3 4 5 6 7

Ferry, WA + 0 - - 0 - -

Stevens, W A +0--0- -

Pend Orielle, WA + 0 - - 0 - -

Boundary, I D + 00 - + - -

Lincoln, M T + 00 - + - -

Sanders, M T + 0 + 0 + 0 0

Mineral, M T + 0 + 0 + 0 0

Missoula, M T + 0 + 0 + 0 0

Ravolli, M T +00000 -

Idaho, I D + 0 + + 00 0

Clearwater, ID + 0 + 0 0 0 -

Adams, I D + 0 + + 0- 0

Grant, OR + o - - - - -

Morrow, O R +0--00 -

Lake, OR + Q - - - - -

Harney, OR + o - - - - -

0 = No Change; - = Negative Impact; + = Positive Impact

Assumptions:

(1) Counties with timber dependent communities wete assigned to ERUs to take advantage of ERU-specific timber harvest numbers.

(2) Alternative 7 was evaluated at 60 percent of Alternative 3.

(3) Alternative 1 represents a continuation of activity levels, standards, and guidelines from the late 1980s.

(4) Alternative 2 represents a continuation of current (1994, 1995) levels and interim directions.

Economic 74?
Figure 5.1 — Economic resiliency of 100 counties within the Basin, weighted by population and by land area.

The size of an area over which economic diversity

is measured is important. The larger the area considered, the greater the economic diversity and

expected economic resiliency, especially if it

includes a large metropolitan area that serves as a

trade center. Neither counties nor communities

are considered to be "functional" economies in

and of themselves because they do not include

enough parts of the economy to constitute a complete system. A multi-county region may be identified as economically strong and resilient, while

individual counties may not be. It is difficult to

characterize with confidence the economic effects

of changing Federal land use on individual counties or communities.

With these caveats in mind, the economic

resiliency ratings calculated for the 100 counties

in the Basin are shown in map 5.2. The average

diversity index for the 100 counties in the Basin is

0.70, slightly lower than the national county average of 0.73. The average county-level diversity is

lower than the average diversity (0.80) of the BEA

areas in the Basin. The economic resiliency of the

63 "Federal lands" counties varies considerably: 9

are high, 19 are medium, and 35 are low.

Finally, we caution against concluding that low to

high ratings are equivalent to bad or good ratings;

the intent is to describe the adaptability or vulnerability of these counties, not to rate them as good

or bad. Generally, most of the people in the Basin

(82%) live in counties that are medium or high in

their degree of adaptability, as measured by economic resiliency. Most of the land area (68%) in

the Basin, however, is in the low category for economic resiliency.

We used the following rule set to identify those

counties in which FS and BLM decisions resulting

Economic
from the Interior Columbia Basin Ecosystem increasingly drive social and economic changes.

Management Project (ICBEMP) may affect eco- Our notions of economic resiliency are based on

nomic resiliency. We considered (1) those Federal the experience of the past five years, which has

land counties in which the percent of agricultural been a period of rapid economic growth fueled in

sales dependent on Federal forage was greater than part by extensive in-migration.

12 percent, (2) counties with low economic _. r . ...

•{• I j r j • • 1 he nature, however, may hold some surprises

resiliency that were denned as recreation counties, . -n i • i-rr i i f?\ • • i • u j that will result in dirrerent outcomes than were

and (3) counties with two or more timber depen- . . . .. . i --IT - u i -j • presented in Haynes and Home (in press). We

dent communities. Using these rules, we identi- { - '. , « r. • i • i £.1,-, • i • .1. -I know, tor example, that the Basin has experienced

hed 17 counties whose economic resiliency might . ' ,. . *. . . . f

be affected by the preliminary draft EIS alterna- periods of both m-migration and out-migration.

tives (table 5.6). The impacts of the alternatives

 In the 1980s' the Basin experienced net out-

• it i- i i i r migration as the United states coped with periods

varied depending on the number and type or sec- r° . . .

 r

 . .

 r

/r j j i i f-u j j or severe recession, structural changes in the econtors arrected and the number or timber-dependent . .. . . .' . . r

 b

 . .

• • • i T • omy that diminished the role or resource based

communities in the counties. Two counties may

 J

, ,. . . . . jj • -I- -j (including agriculture) economies, and booms in

experience reduced economic resiliency under

 v

 , • i ^ ,

Ai • T i u-7// ^ j T i selected economic sectors and regions. Such eco- Alternatives 2 through 7 (Grant and Lake . rr i i /- • r\ ^ TU i • c L nomic downturns may arrect the economy in the Counties, Oregon). 1 he population or these two _ . . . . '. .r

 . . . -r-

• icinx - j- -j i AC c Basin again, particularly ir they have significant

counties is 15,104 individuals, or 0.5 percent or . "& »r ..

/

. n • t

i i • • L D • c /-• \vr u impact on the agricultural sector. Despite these

the population in the Basin. Perry County, Wash- • , , • , ° , t ~, , ij • -i- risks, history has shown that humans are the most

ington may experience reduced economic resihen- '. ' -in- . r- j

cy under Alternatives 3, 4, 6, and 7. Lincoln

 adaPtlv^ Creatures in the Basins ecosystems. Faced

County, Montana may experience negative TMth "t"'

 Y coTMnueTM adaPc

 f

and

 rc

j .1 • /. s- J-7A J demand ecosystem goods and services from h Simpacts under Alternatives 4 , 6 , an d 7 . Adams I^T» , i--i i i - • ^ -

/- TJ L • • and BLM-admmistered lands in the Basin. County, Idaho may experience a negative impact

under Alternative 6 only. Because of its greater _, . TJ/J» •

reductions in cattle grazing, Alternative 7 may .Economic r/mciency

reduce the economic resiliency of two additional Qur evaiuation of economic efficiency examines

counties: Harney County, Oregon and Owyhee the yalue of outputs that sodety deriyes from FS.

County, Idaho. The negative effect Alternative 1 and fiLM-administered lands in the Basin. While

has on recreation may adversely affect four coun- «outputs" could be defined as including a wide

ties (Benewah, Custer, and Teton Counties, Idaho; array of ecosystem goodS) functions, and condiand Teton County, Wyoming). dons desired by society> because of limhed data

Uncertainty—These assessments of economic

 we were able to

 include only four specific outputs

resiliency assume that the counties and BEA areas

 in this

 analysis: range, recreation, timber, and

within the Basin will continue (in the next unroaded areas. To perform this evaluation, we

decade) to experience the economic and demo- developed a series of assumptions. All of our calgraphic patterns of the recent past. We expect that culations are for the year 2005. Range, recreation,

structural changes in the United States economy

 and timber values are

 Placed on the site at which

(for example the growth in the trade and service

 the7 are used' thus the7 are

 "on forest" (National

sectors) and technological changes (for example in

 Forest) or

 "on BLM district." All values were

telecommunications) will continue to affect eco-

 taken from the 199° Resource Planning Area

nomic and social well-being. These changes have (RPA) (USDA 1990), inflated to 1994 dollars,

allowed individuals greater choices about where

 then

 indexed to real price in 2005 (table 5.7). For

and how to live. In the Basin, this freedom has led

 range

'

 we used A^M numbers calculated for each

some people to argue that quality of life will alternative. The value for range includes both its

value as forage, and consumer surplus.

Economic 749
Map 5.2 -- Map showing economic resiliency ratings calculated for 100 counties within the Basin. 

Economic 
Table 5.6 — Economic evaluation of the preliminary draft EIS alternatives on economic resiliency of

selected counties in the Basin.1

Alternative

County 1 2 3 4 5 6 7

Ferry, WA 0 0 - - 0

Lincoln, M T 000-0- -

Mineral, M T 000000 0

Ravolli, M T 000000 0

Clearwater, I D 0 0 0 0 0 0 0

Adams, I D 00000- 0

Grant, O R Q ---- - -

Morrow, O R 000000 0

Lake, O R r j ---- - -

Harney, O R 000000 -

Custer, I D -00000 0

Adams, W A 000000 0

Teton, WY - 0 0 0 0 0 0

Camas, I D 000000 0

Owyhee, I D 000000 -

Benewah, I D -00000 0

Teton, ID - 0 0 0 0 0 0

0 = No Change; - = Negative Impact; + = Positive Impact

'The Basin is defined as those portions of the Columbia Rivet basin inside the United States east of the ctest of the Cascades and those pottions of

the Klamath River basin and the Great Basin in Oregon.

Rule set for determining identified inputs on economic resiliency.

(1) Counties with two or more timber-dependent communities.

(2) Counties with grazing dependency of more than 12 percent.

(3) Nontimber and grazing-dependent counties with low economic resiliency, low population density, and not designated as a recreation county.

Assumptions:

1) Alternative 1 represents a continuation of activity levels, standards, and guidelines from the late 1980s.

2) Alternative 2 represents a continuation of current (1994, 1995) levels and interim directions.

For recreation, we evaluated the preliminary draft 1990) which show differences depending on

EIS alternatives based on their effect on the num- where in the Basin the recreation activity occurs,

ber of acres in various ROS classes. We assumed and higher values for some activities taking place

that the people recreating in the Basin live in in unroaded areas.

seven northwestern states (Idaho, Montana, _ . . ... r . . .

Nevada, Oregon, Utah, Washington, and Wyom-

 F

L°

r timber' TM ^ed projections of timber harvest

ing). We used standard projections of population

 sh°TM 'n table 5'2

; Timber values depicted in

and their characteristics in these states for the year

 table 5

-

8r^ct volume-weighted averages of

2005 (U.S. Department of Commerce 1990). We Prices Pald fo[ "TMbf

r harvested from Na

»

onal

used a model to project recreation activity

 Forests m each ERU'

(Haynes and Home, in press). Coefficients were We assumed changes in unroaded areas in each

tailored to replicate behavior of residents of the £RU were in direct proportion to the existing

Northwest (Hospodarsky 1989). We used recre- ratio between primitive/semi-primitive acres and

ation values developed for the 1990 RPA (USDA unroaded acres. Value, in this case, refers to what

Economic 751
Table 5.7 — Willingness-to-pay values' in the year 2005 for range and recreation outputs by Basin ecological reporting unit (ERU).

Output ERU1-6 ERU7-9 ERU 10-13

1994 dollars

Range (per AUM)2 9.25 9.25 9.25

Recreation (per person activity day)3

Camping 9.36 6.50 7.32

Day use 9.36 6.50 7.32

Fishing 61.47 42.66 42.35

Hunting 47.65 49.71 48.65

Motor boating 2.46 2.46 6.16

Motor viewing 4.88 4.12 3.40

Nonmotorized boating 3.70 9.85 8.62

Off-road vehicle use 4.88 4.12 3.40

Snowmobiling 4.83 4.08 3.36

Trail use 7.43 7.05 6.94

Viewing wildlife 32.10 30.71 31.55

Winter sports 40.66 40.66 40.66

Wilderness4 44.16 31.55 31.55

Source: 1989 RPA unless otherwise noted, inflated to 1994 dollars using consumer price index.

'All willingness-to-pay values are determined "on forest" (National Forest) and do not include other production costs associated with the activity.

2

Personal communication. 1995. Linda Langer, U.S. Forest Service Economist, Washington, D.C. On file with: U.S. Department of Agriculture,

Forest Service, U.S. Department of Interior, Bureau of Land Management, Interior Columbia Basin Ecosystem Management Project, 112 E.

Poplar, Walla Walla, WA 99362. Inflated from 1993 dollars using producer price index.

'Source: USDA 1990, inflated from 1989 to 1994 dollars using consumer price index. An "activity day" is the average amount of time spent during 24 hours pursuing that activity. These values include fees, but exclude expenditures that represent a cost of production, such as travel costs.

'Value when camping, day use, nonmotorized boating, or trail use takes place in wilderness area.

people are willing to pay for unroaded areas to We used the number of U.S. households because

simply exist. This value is separate from that of unroaded areas are a classic public good and

recreation in unroaded areas, which is included in demand is properly viewed from the national scale,

the recreation value. Using the value of unroaded _ ~ T T . . . . . .

areas as described in studies by Walsh and others Effects—Using these assumptions, we calculated

(1984), and Pope and Jones (1990) (in Haynes *c value to society of the four outputs from the

and Home, in press), we assumed that households !J- and BLM-admimstered lands in the Basin,

are willing to pay $40 per year for the 5.8 million

 Thls

 calculation is not without controversy in that

unroaded hectares (14.3 million acres) in the «involves the different notions of value and the

Basin. In this evaluation we were requested to effectiveness of expressing different types of values

make an additional assumption that undesignated,

 (su'h

 TMTM"b*' non-market, and existence valunroaded areas are half the value of designated

 u

L

es) m doll

,

ar

 ^nominated "nits. In keeping with

wilderness areas.14 We then multiplied that value the principles of economic welfare analysis we

by the 116 million households expected to exist in

 mcluded as

,

man

y

 s°urces of v^ue

, PrTMded '<°

the United States in the year 2005 (USDA 1990).

 soclet

y

 b^ these lands

 * Posslble <Field 1994'

'•'Designated wilderness in the UCRB and EEIS planning areas are 56 and 90 percent of the unroaded areas, respectively.

762 Economic
Krutilla and Haigh 1978). In an economic sense,

an examination of the full array of ecosystem

management benefits requires a conscious attempt

to place value on intangible benefits. The outputs

discussed here are the only ones for which we had

both output measures and values.

In the EEIS planning area (fig. 5.2), recreation

ranks highest in value, followed (in order) by

unroaded areas, timber, and range. In the UCRB

planning area (fig. 5.2), the ranking of outputs,

from highest to lowest is unroaded areas, recreation, timber, and range. The value of unroaded

areas can be viewed as a proxy for the unroaded

character and the species composition, "oldgrowth" forest, and other ecosystem characteristics

that people associate with such areas. These rankings explain what lies at the heart of the economicchoice question concerning the consequences of

FS and BLM land management in the Basin: while

the values of recreation and unroaded areas are not

expressed in the marketplace, they exceed those of

range and timber. These findings are consistent

with other studies (for example, Haynes and others

1992). The 1990 RPA found for FS-administered

lands that while "timber and minerals benefits

dominate the receipts... recreation and wildlife

and fish program benefits dominate the marketFigure 5.2 — Partial net economic benefit of continuation of current, year 2005, in the EEIS and UCRB

planning areas.

Economic
clearing price benefits" (USDA 1990). This calcu- 3 through 7 would represent a loss to society of

lation did not include the benefits or existence $33 to $136 million per year, or 1 to 5 percent of

value of unroaded areas, as does our analysis. It is the value provided by these FS- and BLM-adminunlikely that addressing the controversial details of istered lands. For the UCRB area, at one extreme

die methods used to derive these numbers would Alternative 3 represents a gain of $48 million per

change the relative rankings we found. The signif- year (1 percent), while at the other Alternative 7

icance of this information is that in the big pic- represents a loss in value of $83 million per year

ture, the non-market outputs from the FS- and or 2 percent of the value provided by these FSBLM-administered lands in the Basin provide and BLM-administered lands. To choose any

more benefits than do the market outputs. alternative with a negative change, decision makRegarding the preliminary draft EIS alternatives, ers would have to determine that either they preif decision makers explicitly acknowledge the rela- ferred the distributional effects, or that the gain

tive importance of the various outputs provided from unquantified and unvalued outputs of

society by these lands, then management plans ecosystem management were at least equal to the

may become more socially acceptable. losses. Examples of such unquantified and unval-

,.,,, . . . ued outputs include stronger fish populations,

When compared to Alternative 2, overall net eco- ^ of old rowth> improved water qualitV;

nomic value is little affected by any alternative, reduced floodi reduced Hsk of fire Qr

increasing at most by 5 percent (under Alternative im oved ecosystem health.

1) and decreasing no more than 3 percent (under

Alternative 7) (table 5.9). Net economic value is Most of the change in net economic value

calculated as the sum of the values of range, recre- between alternatives is due to different timber valation, timber, and unroaded areas—an admittedly ues, $5 million to $556 million higher in Alternapartial accounting. For the EEIS area, Alternatives tives 1, 3, and 5; $48 million to $199 million

lower in Alternatives 4, 6, and 7. In Alternatives 1

T ui co wnr i • u and 5, increased timber values are at the expense

Table 5.8—willmgness-to-pay values in the year - ' .... tf .... . .

 r

 .

innc c • L u T> • 1-1 • or 3>71 million to J> 131 million in recreation val2005 tor timber, by Basin ecological reporting „.. .... „._... . . . .

• /-cnm • mn/.i j n ues, and $4 million to $7 million in unroaded

unit (ERU), using 1994' dollars. _, , c • • -c i

areas. 1 he value or range is most sigmhcantly

Ecological Reporting Unit Timber2 affected by Alternative 2 in which it is reduced by

$ 10 million per year.

Dollars per MBF

 F 7

Northern Cascades 148

 In the EEIS area> ovendl net

 economic values are

Southern Cascades 130 l°wer in Alternatives 3 through 7 primarily

Upper Klamath 440 because timber values are reduced by $27 million

Northern Great Basin 262 to $123 million. Recreation values decrease by $4

Columbia Plateau 370 million and $5 million in Alternatives 1 and 5,

Blue Mountains 232 • i TU i c A A u <ta Northern Glaciated Mountains 226 respectively. The value of range is reduced by $3

Lower Clark Fork 178 million in Alternative 7, and the value of unroadUpper Clark Fork 136 ed areas is reduced by $2 million and $ 1 million

Owyhee Uplands 14 [n Alternatives 1 and 5 respectively.

Upper Snake 58

Snake Headwaters 62 In the UCRB area, Alternatives 1,3, and 5

Central Idaho Mountains 444 increase net economic value relative to Alternative

'Personal communication. 1995. Richard Haynes, Economist,

 2 b7 $4 million tO

 ^6 million, while AlternaUSDA, Forest Service, Pacific Northwest Research Station, Portland, tives 4, 6, and 7 decrease Value from $3 million to

OR 97208. ... . . $83 million. The patterns for range, recreation,

2Willineness-to-pay is calculated by adding stumpage price and con- .1 i i i • *i i r i

sumer surplus (estimated as 10% of stumpage price).

 tlmber> and

 Unroaded are Similar to those for the

Basin as a whole.

7U4 Economic
Table 5.9 — Net economic value of alternatives in the year 2005 for range, recreation, timber, and

unroaded areas, for total Basin, EEIS, and UCRB.

Alternative

1 2 3 4 5 6 7__

Millions of dollars per year

Basin 8,373 7,955 7,960 7,907 7,926 7,867 7,746

Range 24 24 24 24 26 24 13

Recreation 3,434 3,565 3,565 3,565 3,494 3,565 3,565

Timber 1,061 505 510 457 550 417 306

Unroaded 3,854 3,861 3,861 3,861 3,857 3,861 3,861

EEIS 2,747 2,585 2,542 2,540 2,552 2,531 2,459

Range 666676 3

Recreation 1,322 1,326 1,326 1,326 1,321 1,326 1,326

Timber 441 244 201 199 217 190 121

Unroaded 1,007 1,009 1,009 1,009 1,008 1,009 1,009

UCRB 5,626 5,370 5,418 5,367 5,374 5,335 5,287

Range 18 17 18 17 19 17 10

Recreation 2,111 2,239 2,239 2,239 2,173 2,239 2,239

Timber 650 261 309 258 333 227 186

Unroaded 2,847 2,852 2,852 2,852 2,849 2,852 2,852

Equity natives 1 and 5. The recreationists that would lose

from Alternatives 1 and 5 would be campers,

The benefits derived from FS- and BLM-adminis- skiers, and day and trail users,

tered lands in the Basin are distributed widely—to

people living inside and outside the Basin, the rich SlUlUfldrV

and poor, and blue-collar workers and professional

managers. Alternatives 4, 6, and 7 would reduce Regarding economic development, the effects of

the benefits to consumers of timber products from the preliminary draft EIS alternatives on jobs

Alternative 2. Alternative 7 would slightly reduce Basin-wide would be within 1 percent of those

the value of cattle grazing on FS- and BLM- resulting from FS- and BLM-administered lands

administered lands in the Basin. Alternatives 1 and under continuation of current management. As a

5 also would decrease benefits to recreationists percent of all jobs in the Basin, the impact would

overall, but some of the recreationists would gain be 0.1 percent. Alternatives 1 and 5 would decrease

while others would lose. In the EEIS area, the Basin-wide employment in jobs resulting from

road assumptions suggest that Alternatives 1 and 5 recreation activity by 0.5 percent and 0.25 percent

would increase benefits to anglers and increase respectively of the total current Basin employment,

benefits to day and trail users (see table 5.10). Under Alternatives 1 and 5, in the EEIS area, the

This has to do with roads and access, but it does increase in timber employment would be offset by

not include feedbacks between road building and losses in recreation employment. Under Alterlevels of fish populations. In the UCRB area (table natives 3, 4, 6, and 7, timber jobs are reduced with

5.10), the impacts on recreationists would be no offsetting gains in recreation. Jobs associated

more complex. The overall decrease in recreation with recreation activity do tend to pay less than

benefits would include increased benefits to timber jobs, but economic indicators of recreation

anglers, hunters, and motor viewers under Alter- counties are stronger than those of manufacturing

counties (Haynes and Home, in press).

Economic 765
Table 5.10 — Change in net economic value of recreation by activity, from Alternative 2 to Alternatives 1

and 5.

Motor Viewing Winter

Area/Alternative Camping Day use Fishing Hunting viewing Trial use wildlife sports

Millions of dollars per year •--

Basin

1 -38.98 -87.07 110.83 30.38 12.63 -89.63 -3.24 -71.26

5 -23.84 -54.40 62.96 16.85 7.71 -48.19 -0.48 -34.89

EEIS

1 -6.00 -11.13 21.98 2.67 2.17 -11.14 1.82 -5.62

5 -5.30 -9.59 18.32 2.07 1.50 -9.74 1.73 -5.25

UCRB

1 -32.98 -75.94 88.85 27.71 10.46 -78.49 -5.06 -65.65

5 -18.54 -44.81 44.64 14.78 6.20 -38.45 -2.21 -29.64

Ten counties might experience negative effects areas than from their production of timber and

from the range management direction proposed cattle forage. Yet, at the margin, most of the

under Alternative 7, but not from the other alter- impact under all of the alternatives would involve

natives. Twenty-one counties might experience reduced timber production. From this standpoint,

negative economic effects from road management to justify choosing any alternative that generates

decisions under Alternatives 1 and 5 through their fewer benefits relative to Alternative 2 (continuaimpact on recreation activity. Four of these coun- tion of current), decision makers would have to

ties are among the 10 range counties. All 16 tim- prefer their distributional effects, or believe that

ber counties might experience negative impacts on the value of the ecosystem outputs gained under

dieir timber sector with the exception of Alter- these alternatives that are not included in the

natives 1 and 5. Combining this information with analysis are worth at least $33 to $136 million per

measures of economic resiliency, we found two year in the EEIS area, and $3 to $83 million per

counties (Grant and Lake Counties, Oregon) year in the UCRB area. Examples of such outputs

whose economies may experience impacts from include fish populations, "old-growth" forests,

these alternatives; about 0.5 percent of the Basin water quality, risk of wildfires and floods, and

population lives in these two counties. ecosystem health.

Given these numbers, it is difficult to argue that As best we can determine, the effects on people

FS and BLM decisions broadly affect economic who recreate in the Basin, who value the existence

development in the Basin. Rather, the effects are of unroaded areas, and who consume cattle raised

more limited and local in nature. For most people on BLM- and FS-administered lands will be

in the Basin, expansion in other economic sectors minor. Purchasers of lumber products will experimeans that the impact of FS and BLM decisions ence only minor changes in the price of lumber

on their employment and income will be negligi- products. The most significant negative effects

ble. If the agencies wish to minimize their impact will be experienced by people employed by the

on economic resiliency, they can focus attention timber industry in the Basin. It is hard to say how

on their actions in the two identified counties. long they will experience these impacts, but given

„. i • r i • ir i compensating increases in harvests from private

1 he conclusions from the economic welfare analy- i j j L c i.

• J-CT T-L i-o JT>TX, T j • • land and the pace of recent economic growth

s is ar e quite different. Ih e rd - an d IsLM-adminis- i •• LUL L i-j

. .

n

 . . . . . , , „ these transitions should be short lived,

tered lands provide society with greater benefits

from recreation and the existence of unroaded

?!»8 Economic
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