William David Klemperer
Published: 1971
Total Pages: 462
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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 alternative.
