Roles for Commodity Production in Sustaining Forests & Rangelands

1. Roles for Commodity Production in Sustaining Forests & Rangelands J. Keith Gilless Professor of Forest Economics UC Berkeley

2. Outline • Sustainability • Downward harvest trends • Fuel reduction • Role of commodities

3. Sustainable Forestry: Definition “The practice of meeting the forest resource needs and values of the present without compromising the similar capability of future generations” (from The Dictionary of Forestry, 1998)

4. Sustainable Forestry: Montreal Process Criteria • Conservation of biological diversity • Maintenance of productive capacity • Maintenance of health & vitality • Maintenance of soil & water resources • Maintenance of contributions to carbon cycles • Maintenance & enhancement of long-term multiple socio-economic benefits to meet the needs of society • Legal, institutional, and economic framework for conservation & management

5. Interpreting the Criteria • Constraints on commodity production • Opportunities to for commodity production to contribute to sustainability • Expression of the multiple use nature of forest management • Important to understand how we got where we are on the National Forests

6. Evolution of Multiple-Use of National Forests • Early 20th Century: Reserves for timber production and watershed protection • Post WWII Economic Expansion: Increased recreational use & commodity production (timber, grazing, mining) • Multiple-Use & Sustained Yield Act (1960): Joint consideration of major uses & validation of fish & wildlife habitat management

7. Dominant Use • What actually emerged • Advocated for by Public Land Law Review Commission (1970) • Promoted by resource-specific orientation of resource managers and Congressional funding decisions favoring commodity production

8. Impact of NEPA & ESA • National Environmental Policy Act (1969) & Endangered Species Act (1973) increased accountability for management decisions and limited role of economic criteria • Prompted research on interactions between timber production and other resource systems

9. RPA & NFMA • The Forest & Rangelands Renewable Resources Planning Act (1974) & National Forest Management Act (1976) required clear statements of objectives and evaluation of alternatives • Prompted research on tradeoffs between timber production and resource uses (e.g., cost of improving water quality)

10. Ecosystem Management • USFS mantra for the last decade • Promoted “holistic” thinking that is relatively consistent with current emphasis on sustainability • Sometimes characterized as permitting commodity production only in the furtherance of goals for other resource systems • Both harvesting and fuel reduction programs are consistent with ecosystem management and sustainability criteria – jobs vs. environment rhetoric has always been misleading

11. Downward Harvest Trend: Causes • Significantly reduced harvests on the National Forests (~15% of total) • Increased regulation on private harvests • Volatile lumber prices • Weakness in associated industrial sectors • International competition

12. Downward Harvest Trend: Impacts • Inventory is increasing: Growth exceeds harvest for all ownership classes (6:1 for USFS) Growth exceeds harvest for all species (lowest for true firs 1.1:1, highest for hardwoods 38:1)

13. Downward Harvest Trend: Impacts • Changes in the industrial sector: Mills must reach further out to find raw material (both interstate and intrastate) Mill closures, loss of production capacity, & increased industrial concentration

14. Downward Harvest Trend: Impacts • Socio-economic impacts Declining employment and income in the lumber & wood products sector (SIC 24), only partly offset by increasing secondary manufacturing Impacts on communities that are significant locally, but masked regionally or at a state level

15. Fuel Reduction • Millions of acres would benefit from some type of mechanical treatment to reduce fuel loading • Costs vary due to operation, terrain, and intensity of treatment, but many areas will be too expensive to treat • Prescribed fire often less costly than mechanical, but will often yield more sediment on steeper or wetter sites, and air quality considerations will continue to be a limiting factor

16. Fuel Reduction (Con’t) • Lack of social consensus with respect to treating WUI or more remote areas • Significant investments would be needed in new non-conventional sawmills & biomass power plants to utilize materials removed from the forest • Further development of the biomass sector in a way that supports the National Fire Plan will require state and federal cooperation to define a more stable business operating environment

17. Role of Commodities In a 2002-3 survey of California’s primary wood product industry, the most important issues identified as affecting the next fire years were: (1) Energy costs (2) California regulations (3) Timber availability (private) (10) Timber availability (federal) How should we interpret this?

18. Where Does This Get Us? • Recall the need for a “Legal, institutional, and economic framework for conservation & management”