Abstract:
Spawned by the current interest in revising Oregon's Forest
Conservation Act, this study defines the forestry regulation problem
and outlines theoretical approaches to its solution.
Unregulated private forestry is found to present opportunities for
government intervention, the gains from which could exceed the
losses. Proposed is a public goal of maximizing net satisfactions
from Oregon's private forest lands, subject to specified constraints
and assumptions This goal is derived in a chapter on welfare
economics.
Following an evaluation of past regulation goals and approaches,
the study discusses guidelines for regeneration and logging regulations
consistent with the assumed regulatory objective In a full employment
economy it appears that public regulation of private forestry is
which the unregulated market would attain (ignoring non-wood benefits).
However, government leasing of private land for wood production
does provide a possibility of increased satisfactions from wood
output. Upon considering non-market forest benefits and undesirable
side-effects of logging, welfare-increases from intervention are
shown to be possible.
After reviewing the concept of optimal levels of spill-over
effects, the study points out the possibility that optimal levels of nonmarket
damages could depend on whether the liability for damage reduction
is placed on the victims or the damager. Considering both
liability viewpoints, a scheme for determining optimal regeneration
regulations is outlined for cases where non-market values are at
stake. Approaches to optimizing levels of external non-market
damages from logging are then examined under each liability scheme,
considering actions causing changes in single or joint benefits. The
importance of distinguishing between mutually exclusive and additive
management practices is illustrated.
Forestry-caused environmental changes discussed under nonmarket
benefits include variations in water siltation and temperature,
fish and big game populations, and scenic beauty.
The study aims to assist economists advising planners of forest
practices legislation and administrative regulations. Much of the information presented would be useful in designing such intervention today to approach the study's assumed regulatory goal. Other more
detailed decision guides are proposed for research to determine
optimal regulations on study areas. Broad application of such research
results could increase welfare by a greater amount than could
preliminary regulations designed immediately.
Throughout the study, emphasis is placed upon the need for, and
possibility of, making incremental analyses comparing marginal
benefits and costs even when these marginal quantities are in different
units. Evaluation of regulatory alternatives is left to decision makers,
the study simply illustrates ways of arraying and comparing alternatives
and points out implications of various approaches to forest practices
regulation.
