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Market impacts of a multiyear mechanical fuel treatment program in the U.S

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  • Prestemon, Jeffrey P.
  • Abt, Karen L.
  • Huggett Jr., Robert J.

Abstract

We describe a two-stage model of global log and chip markets that evaluates the spatial and temporal economic effects of government-subsidized fire-related mechanical fuel treatment programs in the U.S. West and South. The first stage is a goal program that allocates subsidies according to fire risk and location priorities, given a budget and a feasible, market-clearing market solution. The second stage is a quadratic welfare maximization spatial equilibrium model of individual State and global product markets, subject to the fuel treatment allocation. Results show that the program enhances timber market welfare in regions where treatments occur and globally but has an overall negative economic impact, once fuel treatment program costs are included. The overall cost of a mechanical fuel treatment program, when considering timber market welfare, transport costs, treatment costs, and timber receipts, exceeds $1000 per acre, implying that the long run fire effects and ecosystem net benefits of a treatment program would need to exceed this figure in order to justify widespread implementation.

Suggested Citation

  • Prestemon, Jeffrey P. & Abt, Karen L. & Huggett Jr., Robert J., 2008. "Market impacts of a multiyear mechanical fuel treatment program in the U.S," Forest Policy and Economics, Elsevier, vol. 10(6), pages 386-399, August.
    • Handle: RePEc:eee:forpol:v:10:y:2008:i:6:p:386-399
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    References listed on IDEAS

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    1. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, September.
    2. 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, Elsevier, vol. 8(3), pages 312-322, April.
    3. Darius M. Adams & Clark S. Binkley & Peter A. Cardellichio, 1991. "Is the Level of National Forest Timber Harvest Sensitive to Price?," Land Economics, University of Wisconsin Press, vol. 67(1), pages 74-84.
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    Cited by:

    1. Miguel Riviere & Sylvain Caurla & Philippe Delacote, 2020. "Evolving Integrated Models From Narrower Economic Tools : the Example of Forest Sector Models," Post-Print hal-02512330, HAL.
    2. Prestemon, Jeffrey P. & Abt, Karen L. & Barbour, R. James, 2012. "Quantifying the net economic benefits of mechanical wildfire hazard treatments on timberlands of the western United States," Forest Policy and Economics, Elsevier, vol. 21(C), pages 44-53.
    3. Crandall, Mindy S. & Adams, Darius M. & Montgomery, Claire A. & Smith, David, 2017. "The potential rural development impacts of utilizing non-merchantable forest biomass," Forest Policy and Economics, Elsevier, vol. 74(C), pages 20-29.
    4. Becker, Dennis R. & Nechodom, Mark & Barnett, Adam & Mason, Tad & Lowell, Eini C. & Shelly, John & Graham, Dean, 2009. "Assessing the role of federal community assistance programs to develop biomass utilization capacity in the western United States," Forest Policy and Economics, Elsevier, vol. 11(2), pages 155-162, March.
    5. Korhonen, Jaana & Henderson, Jesse D. & Prestemon, Jeffrey, 2023. "National forest timber bids and export price interlinkages in the USA: The bounds testing approach," Forest Policy and Economics, Elsevier, vol. 152(C).
    6. Barbour, R. James & Fried, Jeremy S. & Daugherty, Peter J. & Christensen, Glenn & Fight, Roger, 2008. "Potential biomass and logs from fire-hazard-reduction treatments in Southwest Oregon and Northern California," Forest Policy and Economics, Elsevier, vol. 10(6), pages 400-407, August.

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