The latest battle in the timber wars provides vividly contrasting views of the impact of last summer’s Rim fire, which burned across over 250,000 acres in the Stanislaus National Forest, Yosemite National Park and on private lands, at one point threatening the water supply for the San Francisco Bay Area as the fires reached toward Hetch Hetchy Reservoir. In early December, the Governor of California, in a letter to President Obama requesting a national disaster declaration by FEMA to allow access to federal funds for recovery efforts, cited a report by resource economists estimating the range of losses in environmental benefits from the fire at $100 million to $736 million, with another $102 million to $797 million in lost carbon storage. Indeed, in a news account the author of the report characterized those estimates as “very, very conservative,” adding that “spending a few million dollars on tree-thinning in the Stanislaus National Forest may appear more appetizing when the costs of fire damage to the environment are better known.” The report itself noted that the policy of managers in Yosemite in recent years to allow low intensity fires to burn, reducing understory vegetation was at least in part the cause of “beneficial low intensity slower moving ground fire” in areas near the Hetch Hetchy reservoir.
Then in a report issued this month, the Center for Biological Diversity argued that the high ecological value of burned forest land dictates rejection of Forest Service plans for timber-cutting on 70,000 acres of severely burned-over land in the Stanislaus National Forest scarred by the Rim fire. There is truth in both conclusions; forest fires are natural, and inevitable, occurrences, and nature has developed ways of dealing with their consequences, but in the “unnatural” conditions that often exist on federally-managed lands, a forest fire can cause severe and long-lasting damage to the environment. And, at least in the view of the State of California and the people living, working and recreating around Yosemite, CBD may have gone a bit too far with its conclusion that “[t]he Rim fire was not ecologically damaging, but rather biologically restorative.”
At least in this case the State is not using its ecological loss study to assert a massive damage claim. In connection the 2007 Moonlight Fire, the US used a broadly worded California state statute to support use of a similar analysis in litigation. The outgrowth of that claim and the magnitude of the resulting settlement was a modification of the statute to limit the measure of damages in forest fire claims.
However, the State’s effort to monetize the destruction resulting from forest fires does highlight another increasingly frequent tactic – the use of resource economists to provide estimates of the value of resource impacts to drive policymaking. Generally, there is no objective, reliable way to monetize the benefits provided by natural resources. Direct use of these methodologies for the purpose of damage calculation in litigation has appeared to be nearly dead after repeated court rejections (although contingent valuation is apparently being attempted in the Deepwater Horizon spill). However, agencies are relying on “willingness to pay” survey methodologies, such as contingent valuation, to develop a monetary measure of how the public values the resources. E.g., the National Park Service announced in November 2013 year that it was undertaking a survey of roughly 6400 people to determine what they would pay for improved visibility in national parks and wilderness areas, with the results to be used by EPA as it works with states to reduce regional haze.
In the case of the Rim fire, no new studies were undertaken. Instead, the economists used what is referred to as the “benefits transfer” approach, in which the economists simply identify existing studies – often “willingness to pay” surveys — by other researchers who had examined the value of similar habitats, and used those (widely varying) reported values to develop a range of minimum and maximum values for the habitat destroyed or injured by the fire. The use of “willingness to pay” surveys, either conducted specifically for a site, or through use of “benefits transfer,” to weigh policy options is less contentious than the use of those methodologies in judicial proceedings as evidence of actual resource damages.
However, be careful. An agency can justify very expensive regulatory schemes through use of a flawed “willingness to pay” analysis. And it can be expected that these types of surveys, developed initially only to assist agency policy cost/benefit analyses, will later return in a natural resource damage context as studies included in a plaintiff’s “benefits transfer” damage report.