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Earth The Economic Benefits of Old-Growth Forests in the Pacific Northwest:


Have you ever looked into a forest of standing trees and thought of the economic value of leaving them up as 0pposed to cutting them down. Probably not, but this is a topic that is an on going fight between conservation groups and economic interest groups. Some of the economic interest groups would include logging companies, Oil and gas drillers and any one who financially benefits from disturbing the standing trees and wildlife that depends on that forestry. All over the world the value of leaving the trees standing can and does out weigh cutting them down from defending agaisnst silt run off that will destroy salmon spawning grounds in the Pacific north west too the jungles of the Amazon where undiscovered medicines can benefit all of us. Below is an intense study quantifying the value of standing trees specifically national forest in Northern California,Oregon and Washington where logging was king. The future is Bright for the trees!


Prepared for
203 Hoge Building 705 Second Avenue Seattle, WA 98104-1711
99 W. Tenth, Suite 400 Eugene, OR 97401 (541) 687-0051
October 2006
© ECONorthwest 2006


For many observers, May 29, 1991, marks a turning point in the management of forests in Washington, Oregon, and northern California. On that date in Seattle, Federal District Judge William Dwyer ended almost all logging on 17 national forests in these three states until the U.S. Forest Service (USFS) and other federal resource-management agencies could demonstrate that they had cured logging-related violations of the nation’s environmental laws. In particular, Judge Dwyer issued an injunction forbidding the Forest Service from selling more timber in habitat suitable for the northern spotted owl, a species threatened with extinction, until it could provide assurance that it could sell timber without significantly undercutting the species’ continued survival.

The injunction stimulated a process that, in 1994, produced the Northwest Forest Plan (NWFP) covering 24.5 million acres of federal lands in western Washington, Oregon, and northern California. Much of the NWFP focuses on providing adequate habitat for northern spotted owls, marbled murrelets, salmon, and other species having a close association with the old-growth forests of this region. Within the confines of the NWFP, the term old-growth forest has a specific definition:

A forest stand usually at least 180-220 years old with moderate to high canopy closure; a multilayered, multispecies canopy dominated by large overstory trees; high incidence of large trees, some with broken tops and other indications of old and decaying wood (decadence); numerous large snags; and heavy accumulations of wood, including large logs on the ground.

A common criticism of the NWFP is that its restrictions on logging old-growth forests are bad for the economy. According to this view, forests benefit the economy primarily when they are converted into commodities and, hence, restrictions on logging of old-growth forests deprive American consumers of the lumber, paper, and other commodities that could be produced if old-growth trees were converted into logs.

This view, however, overlooks the economic benefits that residents of the region and other Americans derive from old-growth forests, i.e., from trees left standing rather than cut down. To understand these benefits it is useful to recognize that forests are economically important not just when they produce commodities but also when they provide services, such as providing habitat for at-risk species or producing and regulating the flow of clean water. Over the past several decades, economists and ecological scientists have examined the processes, called ecosystem functions, by which old-growth forests and other ecosystems

Determining the value of the services derived from old-growth forests is generally far more difficult than measuring the value of the commodity goods, such as logs and lumber, derived from these forests. Most forest-related services are not easily traded in markets and do not have monetized prices attached to them. This difference does not, however, mean that the services are necessarily less valuable. Instead, it means economists must use a variety of techniques to determine the value of the services. In the remainder of this report we provide an overview of the findings of research regarding several categories of services provided by old-growth forests of the NWFP. We look separately at research findings that substantiate these conclusions:

A. OldGrowthForestsSupportmanyTerrestrialandAquaticSpecies
B. Old-GrowthForestsandtheHabitatTheyProvideHaveEconomicValue
C. OldGrowthForestsIncreaseWaterSuppliesandProvideValuableWater- Regulation Services
D. Old-Growth Forests Provide Valuable Recreational Opportunities
E. Old-GrowthForestsCanStrengthenLocalEconomies
F. Old-Growth Forests Protect Valuable Assets

For more information regarding the contents of this report, please contact:
Ernie Niemi, ECONorthwest
99 West 10th Avenue, Suite 400, Eugene, Oregon 97401 phone: 541-687-0051 email: niemi@eugene.econw.com

Many species depend on the old-growth forests of western Washington, Oregon, and northern California to survive. Scientists have looked separately at this relationship for terrestrial species and for those that either live in or depend heavily on streams in old- growth forests.
Habitat for Terrestrial Species
More than 1,000 terrestrial species are closely associated with old-growth forests on federal lands in western Washington, Oregon, and northern California, as shown in Table 2:3

Table 2. Terrestrial Species Closely Associated with Old-Growth Forests, by Species Group

Vascular Plants
Total species

Habitat for Water-Related Species
Within the range of the northern spotted owl in Washington, Oregon, and California, more than 100 stocks of salmon, steelhead, and other anadromous salmonid fish are already extinct, and an estimated 314 stocks are at risk of extinction. Of these, 259

stocks depend on federal lands. Anadromous salmonids in these states are especially dependent on having high-quality freshwater in streams because the area has limited amounts of high-quality estuarine and near-shore habitat.
Table 3 shows the number of non-fish species associated with old-growth/late- successional forests that utilize streams, wetlands, and riparian areas. The indicated vascular plants, lichens, mosses, and mollusks are exclusively associated with these areas; the vertebrate species use riparian areas for foraging, roosting, and travel if old- growth conditions are present.

Improved Water Quality in Streams and Clean Water for Municipal-Industrial Use
Algal biomass in headwater streams in old-growth forests are 7 – 14 percent of the algal biomass in headwater streams in logged areas.21
Many cities and industries in the region obtain water from rivers whose waters are sufficiently clean that they require minimal treatment before being distributed to consumers. The watersheds of these rivers typically are forested and exhibit little disturbance. A study of the North Santiam River, which proves water for the City of Salem, Oregon, found the savings for consumers were $18 – 34 per capita per year, and the water supply naturally meets the high quality standards of silicon-chip manufacturing.22

Controlled Runoff and Reduced Flood Risk
Studies near Puget Sound show that, in natural forests, less than one percent of rainfall becomes surface runoff. In contrast, in urban areas 84 percent of the rainfall becomes surface runoff.23
Old-growth forests diminish the peak flows of streams following storms by 33 – 50 percent, relative to logged forests.

When logging of old-growth forests on federal lands was restricted in the early 1990s, many feared the economy of the entire region would collapse, with tens of thousands of workers becoming permanently unemployed. The predictions were wrong. Although some workers and communities saw their immediate economic prospects diminish, the regional economy, as a whole experienced robust economic growth. Evidence indicates that the robust growth occurred not despite the logging curtailment but because of it.
Federal Lands, Including Old-Growth Forests, that Are Managed to Provide Services Rather than Commodities Boost the Economies of Local Communities
Many studies document the positive impacts that federal lands managed for their natural amenities, rather than for timber and other commodities, have on local economies.
• A study of roadless areas on federal lands in Washington concluded that, rather than causing impoverishment of nearby communities, “roadless area protection strengthens their current and future economic base and the sectors of the economy that will be the source of additional jobs and income.
• A study of 250 rural counties in western states found that those counties adjacent to a national park experienced more rapid population growth than other counties, and the designation of wilderness had no negative impact on employment or income. A related examination of all 333 non-metropolitan counties in eleven western states found that the listing of species as threatened or endangered under the Endangered Species Act had no statistically significant, negative effect on growth in employment between 1980 and 1990. Another study found that, between 1969 and 2000, rural counties adjacent to wilderness areas experienced faster growth in population, jobs, and income than those more distant from wilderness.

• Natural-resource amenities, such as those provided by forested federal lands protected against logging, can stimulate growth in population, employment, and income in nearby communities.
• The influence that natural-resource amenities exert on economic development in local communities appears to be increasing.
• Although the presence of protected federal lands is correlated with growth in employment, data from Oregon’s counties shows that logging levels are not correlated with changes in employment in those counties.
• In a retrospective look at how the economy responded to the protection of old- growth forests that provide habitat for northern spotted owl, marbled murrelets, and other species, economists with the Forest Service concluded that the predictions of economic catastrophe failed to materialize.

Old-growth forests in this region conserve valuable assets, such as soil and the genetic legacy of species that, absent the habitat provided by old-growth forests, would face a greater risk of extinction. By reducing sediment in streams and the risk of flooding, old- growth forests also maintain the value of public infrastructure, such as roads, and private property. Old-growth forests also contain large amounts of carbon, both above and below the surface of the ground.
Protect Productive Soils and Infrastructure
Building roads and logging trees in old-growth forests can increase the amount of soil lost through erosion and sedimentation of streams. A summary of research concluded: “Sediment yields from logging and roads are widely documented ... and studies generally show a 2- to 50-fold increase over background levels, with most of the increase associated with roads.” Sedimentation remains higher than background rates more than 5 years after logging.
A 1988 study of the Siuslaw National Forest found that logging on 87,000 acres would increase sediment in streams, which would increase by $770,000 the costs local government would incur during the period to remove the sediment from municipal water supplies and roadside drainage ditches.
Protect Habitat for Valuable Species
The 1988 study of the Siuslaw National Forest also found that the logging would reduce the populations of adult fish in the area by 84,000 salmon and 24,000 steelhead over a thirty-year period. The estimated commercial and recreational value of these fish losses was $1.8 million dollars.
Even logging of forests that contain large trees, but do not yet have all the characteristics of old-growth forests, can destroy valuable habitat and reduce the populations of salmon and steelhead. Managing such a watershed tributary to Tillamook Bay to produce annual salmon populations at historical levels would generate annual benefits of $26.2 million – $52.4 million. The value of the salmon produced in coastal watersheds not damaged by logging may be as high as $4,500 per stream mile per year.

A recent study summarized and augmented research on the economic benefits of restoring salmon populations or, alternatively, of avoiding further declines in salmon populations. It reported that, for incremental changes in population, the value per fish is approximately $872 for Washington Coastal Chum Salmon, Oregon Coastal Coho Salmon, Rogue River Coastal Coho Salmon, and Puget Sound Chinook Salmon.39
One survey of the relevant literature compared the economic benefits U.S. households derive from different rare, threatened, and endangered species.40 It found the annual economic benefits of protecting Pacific salmon/steelhead are $31 – $88 per U.S. household. These numbers, when applied to the approximately 100 million households, indicates the total annual benefits are $3.1 – $8.8 billion. The researchers concluded the economic benefits of actions taken under the Endangered Species Act to conserve the species outweigh the costs.


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