Posts by Holly Fretwell

The first national forests were set aside more than 100 years ago. Under Forest Service management they were intended to provide a continuous flow of water and timber for Americans. By the 1980s the agency provided about 25 percent of US softwood lumber consumption. The timber budget was the largest of all agency activities (see chart). Timber harvest on the national forests has declined by more than 80 percent since 1985. The current agency mission is ecosystem protection but spending has shifted to wildfire management which now makes up nearly half of the agency’s budget. More than half of that is for fire suppression. Nonetheless, wildfire burned nearly 70 million acres over the past decade.

Are Americans getting what they pay for on public lands? Even the General Accounting Office [PDF] questions that:

Historically, the Forest Service has not been able to provide Congress or the public with a clear understanding of what the Forest Service’s 30,000 employees accomplish with the approximately $5 billion the agency receives each year.

Originally posted at Environmental Trends.

Similar to most environmental story plots, this one has a good environmentalist, the Lorax, that holds the moral high ground and a bad, greedy, profit mongering, capitalist, the Oncelor. In this story the Oncelor produces thneeds that appear to be in high demand. During production he clear cuts every last Trufulla tree, smogs the air, and clogs the water. As a result of the Oncelor’s insensitive activities the Brown Bar-ba-loots go hungry for there is no more Truffala fruit, the Swomee Swans can no longer croak a note, and the gills of the Humming Fish have become gummed. All in the name of profit. This, in the end, is also lost because the Oncelor puts himself out of business by extricating every last Truffala tree which are a needed input for thneed production.

In his strategy to garner attention for conservation, Dr. Suess misses the fundamental motivator: incentives. Industry and profit are not necessarily bad and harmful to the environment. Environmental problems are the result of conflicting demands on resources. Given well specified rights, negotiation will motivate the highest valued resource use. If the Truffala forest was open access for anyone to cut, it is possible that the Oncelor and others would race to harvest every last tree. Given ownership, however, the Oncelor is more likely to invest in future trees to ensure the possibility of future production. Weyerhaeuser, for example, is proud to announce that they plant millions of trees every year. They do so not to prove their conservation ethic, rather as an investment in timber for future production.

A bit of green PR doesn’t hurt, either. The list of movie sponsors is a bit surprising, to say the least. As you can imagine, the motivator of many of these sponsors is not just good green ethics as much as good for the bottom line. And that’s OK. If you want to change behavior, change the incentives. Profit is a good motivator. If you want to understand the fundamentals of environmental problems look at the property rights and follow the incentives. Well specified property rights encourage long-term stewardship and ensure accountability. That is the moral of my story.

I have not yet seen “The Lorax” movie but will think about how the storyline may differ given well specified property rights when I do. Indeed, the global trend over several decades has been better property rights, more economic freedoms, and increased prosperity. I do care about the environment, both near and far. And I see things getting better, they really are!

Originally posted at Environmental Trends.

Recycling, “it’s the right thing to do,” right? We hear that line in Montana a lot. And the people that use it gain the moral high ground against skeptics, like me. I have been accused of being an anti-environmentalist as a result. Environmentalist or not, I do believe in conservation. And recycling more to meet an arbitrary mandate does not necessarily make environmental sense.

Montana State University, like many others across the nation, has a goal to increase recycling. The stated goal is to cut waste by 25 percent by 2020. I am not sure where the 25 percent figure came from. It is a nice figure, divisible by five, sounds good.

The purpose is to reduce waste by recycling more because it saves money and is good for the environment. And, we are told, it reduces our carbon footprint. The argument is that recycling more means less garbage is sent to the landfill, so less money is spent in tipping fees. But the costs expended to do that extra recycling are not fully accounted for. The university may “save” money by sending less to the local landfill, but money is spent collecting and delivering the recyclables. A lot of that is done by individuals using their own time and resources to get the material to a common location. That energy and effort expended is hard to tabulate, so providing a fair analysis can be difficult.

Those recyclables then need to be delivered to the manufacturing plant where they are actually transformed. That can be a long way. That transportation takes energy, and more energy is used to remanufacture them. The additional transportation and remanufacturing have their own environmental impact.

Finally, by reducing the waste in the landfill there is less methane produced which can reduce greenhouse gas emissions. Many new landfills actually collect methane, however, and use it to power homes and industry nearby. The local landfill here does not have that capability. But all that additional transport of recyclables and the remanufacturing increases carbon emissions. Whether those emissions are better or worse than the methane that would otherwise be emitted from the landfill has not been determined.

The bottom line is that recycling can be more or less environmentally friendly than the alternatives. It depends upon the materials being recycled, the location of recycling, or distance from remanufacturing, and who is doing the recycling. Recycling at the industry level, for example, often makes more environmental sense because the recyclable materials are already in one common location.

For more, see Dan Benjamin's study on the myths of recycling.

Originally posted at Environmental Trends.

In 1980, Paul Ehrlich, a world famous biologist and author, accepted a bet proposed by Julian Simon, an economist. The bet was to resolve an ongoing debate about resource scarcity. Ehrlich chose five metals (copper, chromium, nickel, tin, and tungsten) and hypothetically bought $200 worth of each. If the real price of the metals increased over the following decade, Ehrlich wagered, it was an indication of increased scarcity. Simon won the bet. The real price of all five metals declined, signifying less scarcity.

Timing is everything. As demonstrated in the figure, the prices of metals wax and wane over time following an overall downward trend. Regardless, Simon’s point remains true. It is human ingenuity that prevents us from running out of resources – even finite resources. The key is not that prices continue to fall over time, rather that prices reflect consumer desires, and producers, given appropriate institutions, will respond.

Prices do reveal scarcity by increasing which, in turn, encourages conservation, substitution, and increased innovation and supply. In the end, the problem of scarcity is resolved by market coordination as shown by prices that peak and fall through the course of history.

Originally posted at Environmental Trends.