Title: Wildfire, timber salvage, and the economics of expediency
Author: Prestemon, Jeffrey P.; Wear, David N.; Stewart, Fred J.; Holmes, Thomas P.
Source: Forest Policy and Economics 8(3): 312 – 322
Description: Administrative planning rules and legal challenges can have significant economic impacts on timber salvage programs on public lands. This paper examines the costs of the delay in salvage caused by planning rules and the costs associated with the volume reductions forced by legal challenges in one case study. The fires on the Bitterroot National Forest in the northern Rocky Mountains in the United States burned 124,250 ha in the summer of 2000, killing valuable timber. A proposal to salvage about 15% of the burned area, containing 0.8 million m3 (176 million board feet) of the damaged timber, was challenged in court, resulting in a mediation plan salvage amount of 0.27 million m3 (60 million board feet). Administrative planning requirements also delayed the initiation of salvage to 2003. Because timber decays following death and damage, the costs of delay can be quantified. We evaluate the costs of both reducing the salvage volume due to the litigation and the losses due to decay from the administrative delay. Simulations show that the court settlement plan created through legal challenge resulted in an $8.5 million loss to the U.S. treasury and an $8.8 million (65%) loss in net welfare under the base case market assumptions. The delay in salvaging the agreed upon salvage amount from 2001 to 2002 reduced revenues from salvage to the U.S. treasury by $1.5 million (25%) and potential welfare benefits by the same amount, under base case assumptions of market sensitivities to prices.
Keywords: Timber salvage, Welfare, Legal challenge, Lawsuit, Stumpage, Wildfire, Catastrophe, Timber market
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Prestemon, Jeffrey P.; Wear, David N.; Stewart, Fred J.; Holmes, Thomas P. 2006. Wildfire, timber salvage, and the economics of expediency. Forest Policy and Economics 8(3): 312 – 322
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