Ban on log exports won't save jobs, environment

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Ban on log exports won't save jobs, environment

By: John A. Baden, Ph.D. Tim O’Brien
Posted on June 08, 1994 FREE Insights Topics:

MANY people share my deep concern with improving and protecting the wildlife, watersheds, and recreation values of forests. Good policy links these goods with sound economic practices. All require landowners' confidence in the future. The proposed export ban on raw logs from private lands subverts this confidence and undermines the management required to reach these goals.

Proponents of the export ban claim it will save jobs and prevent foreign exploitation of our timber resources. These claims reflect poor thinking or personal interests promoted at the public's expense, not legitimate economic, ethical or environmental arguments.

A ban on private log exports has several important, negative effects. It undermines the value of private stands of trees. A ban reduces the prices bid for raw logs and the timber's value. Private owners fear that future laws or regulations may further reduce the value of their timber. Owners and exporters who suffer a politically induced loss today are wary about the possibility of future losses. Hence an export ban shortens investors' time horizons.

Trees take a long time to become harvestable; 50 to 100 years is common. Many of us prefer even older forests for we want forests to produce old-growth values. This is what Jerry Franklin and Jack Ward Thomas' "New Forestry" is about: managing forests to resemble old growth.

If someone is to invest money, effort and time growing and preserving trees for a lifetime or longer, they need strong assurances that their timber's value will not be reduced by unexpected government intervention. The value of their land depends on expectations of the future value of their trees.

Lower timber values immediately reduce people's incentives to preserve and grow timber. Mere talk of a ban could induce some people to log immediately, just as the possibility of endangered species moving to a landowner's land leads many to destroy suitable habitat. A desire to leave the timber market could encourage the rapid conversion of timberland close to cities to residential or commercial use.

Moreover, if owners fear for the future, they plant short-rotation monocultures, trees such as cottonwood and eucalyptus that can be harvested for fiber in 10 years or less. By reducing the time between planting and harvest, they reduce the risk of new, unfavorable laws. A ban thus helps promote monocultures and shorter harvest rotations. Do proponents of an export ban really want this?

The incentives an export ban creates for timber owners have significant environmental consequences. The public goods associated with long-rotation forests - complex ecosystems, wildlife habitat, biodiversity and aesthetics - will be reduced. We can also expect increased soil erosion, stream siltation and damaged salmon runs.

It is important to remember that the most sensitive and valuable ecosystems - those found in old-growth forests - are largely confined to the national forests and parks. Raw log exports from federal forestland have been banned for 25 years. Most private lands harbor second- and third-growth forests. We want their owners to have the means and incentive to adopt ecologically friendly new forestry. An export ban has the opposite impact.

A ban will also induce Japan to import more logs from Third World nations that have less stringent environmental protections than the United States. Increasing the demand for their timber is likely to increase environmental damage abroad. Do environmentalists really wish to increase environmental pressures in places with weak democratic institutions and ineffective environmental protections?

The employment impact of an export ban, much like the environmental consequences, is sometimes misunderstood. Raw log exports cost few, if any, U.S. jobs. Instead, they create many high-paying jobs in export-related industries such as ocean shipping and inland rail. In addition, the premium foreign timber consumers pay for raw logs is additional money injected into the U.S. economy. Nor are bans likely to protect mill jobs. For example, the 1979 ban of red cedar exports failed to halt a decline in Washington cedar mills from 337 to 52.

Raw log exports also lead to the purchase of forest products such as wooden doors and paneling. Raw logs introduce foreign consumers to the quality of U.S. products. The initial exposure builds contacts and leads to the purchase of our timber products. Commerce Department data reveals that processed products comprise 89 percent of the $17 billion market in U.S. forest products exports.

Thus, neither economic theory nor historical experience supports the belief that a ban will preserve U.S. jobs. The Center for International Trade and Forestry's (CINTRAFOR) computer model, backed by 10 years of research, supports this criticism. Congressman Peter DeFazio (D-Ore.), Sen. Max Baucus (D-Mont.), the Sierra Club, The Wilderness Society and others who support the ban base their position on bad economics or expedient politics, not the public interest.

A ban on exports has negative economic and environmental consequences. It contains disincentives to long-term forestry, to environmentally valuable habitat preservation, to jobs in the Northwest and elsewhere, and to increasing the sale of finished wood products in foreign markets. But most important, it erodes the ethical foundations of our society and political economy. The ethical problem alone is sufficient reason to strongly oppose the ban.

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