Sierra Institute’s Response to the Economic Analysis of the Critical Habitat Designation for Northern Spotted Owl


The US Fish and Wildlife Service contracted with a group called Industrial Economics out of Cambridge Massachusetts, to do the socioeconomic analysis of the designation of critical habitat for the northern spotted owl.

The Sierra Institute was commissioned by the National Forest Counties and Schools Coalition to provide third-party analysis.

Here is a link to the page that has the Sierra Institute report, the Executive Summary, and conclusions, and an excerpt from the Executive Summary.

The purpose of this report is to review and provide comments on the May 29, 2012 draft report by Industrial Economics, “Critical Habitat Designation for the Northern Spotted Owl,” prepared for the U.S. Fish and Wildlife Service.

Industrial Economics’ assessment is insufficient in its documentation of cumulative socioeconomic impacts and current socioeconomic conditions. Their interpretation of the charge of “determining whether the benefits of excluding particular areas from the designation outweigh the benefits of including those areas in the designation” is overly
narrow. As an assessment, the report does not comport with sound socioeconomic assessment science and lacks a sufficiently comprehensive evaluation of potential impacts.

While acknowledging a loss of over 30,000 jobs in the timber industry from 1990 to 2010, Industrial Economics argues that these loses were offset by regional population gains of 15% and an 18% employment increase in the decade of the 1990s. Industrial Economics errs by assuming: 1) job gains in the 1990s offset job losses in the 2000s, 2) regional population and job increases directly offset timber industry job declines, and 3) employment gains (and
losses) are equally distributed across the region. They report regional job increases of only 3% in the 2000s, and do so without analyzing impacts associated with the Great Recession, which hit hard many of counties where critical habitat areas are designated.

In discussing timber harvest impacts, Industrial Economics bases its incremental change analysis on a period in which there is a severe downturn in the economy and wood products industry. This results in an undercount of likely impacts. Estimates of harvest totals are generalized and not linked to subunit timber harvest totals, resulting in estimates that, as they acknowledge, “could vary materially from future actual timber harvest…”

Because of the shortcomings of Industrial Economics’ report as a socioeconomic assessment, the Sierra Institute for Community and Environment provides additional analysis and review of socioeconomic conditions. This is done also to improve the understanding of socioeconomic changes that have taken place since 1990 and the potential impacts of
northern spotted owl critical habitat area designation of almost 14 million acres across the California-Oregon-Washington northern spotted owl region. Designation of this amount of land as critical habitat area requires deeper and more comprehensive analysis.


Case studies, two in California and three each in Oregon and Washington, were conducted to better understand socioeconomic changes and current socioeconomic conditions “on the ground.” Some key findings from these cases include in California:
• Siskiyou County lost all its saw mills, has seen its population age, and has lost eight schools, challenging the county to provide for the remaining students and reverse the loss of young families.
• In Humboldt County there are powerfully suggestive relationships between mill closures and student impoverishment as reflected in Free and Reduced Price Meal (FRPM) enrollment rates. This county has suffered dramatic declines in its goodsproducing sector, with the manufacturing subsector losing 65% of its 1990 jobs by 2011.
In Oregon:
• Tillamook County has 24% of its children living in poverty, and 39% living in singleparent households, almost double the national average.
• Douglas County has 31% of its children living in poverty – twice the national average and 34% in single-parent households.
• In both of these counties, but especially in Douglas County, there are significant declines in manufacturing jobs, particularly since 2008. Free and Reduced Priced Meal participation rates increased over the last four years as well, some schools by almost 20 percent.
• Josephine County, over the last several decades saw forestry and logging jobs decline by 80%. Wages have stagnated and are two-thirds of the Oregon average. The county now ranks near the bottom of Oregon counties in health indicators and FRPM participation rate for the county is 70%.
In Washington:
• Grays Harbor County Natural Resources and Mining jobs declined by over 50% and
Forestry and logging jobs by just under 70% from 1990 to 2010. The county is near the bottom of the health rankings for counties in the state. FRPM participation rates for the county exceed 60%, with one school district at 92% in 2011 and another at 88%; the lowest rate is 41%, reflecting the considerable differences across the county.
• Skamania County has 90% of its land in federal ownership, and 59% of the land in the county is designated as critical habitat area. Natural resource and manufacturing jobs have declined by over 50% over the last 20 years, though service industry jobs have increased dramatically during this period.
* * *
Timber receipts and, more recently, the Secure Rural School and Community Self-Determination Act (SRS) payments to replace lost timber receipts to counties and schools have been historically important. In California, on average, Humboldt County Schools received just under 5% of their funding through SRS; Siskiyou received on average just
under 7%; and Trinity County received 15%. In Oregon, U.S. Forest Service SRS funding has provided on average 23% of county road budgets, with six counties receiving over 40% Response to the Economic Analysis of Critical Habitat Designation for The Northern Spotted Owl of their total road budget. Though dramatically lower in 2011, SRS payments comprised 40% or more of Skamania County general fund throughout the 2000s. In Oregon O&C counties, the Bureau of Land Management contribution to county budgets has been significant. In Douglas County in 2009 it comprised 17% of total county revenues and in Jackson County, it makes up 7% of total county revenues.
Eighteen counties received SRS O&C funding that goes directly to county general funds.
SRS is scheduled to expire in 2013. Loss of these funds will challenge already financially cash-strapped counties and school districts.
The time has long since past that we “reconcile” what Industrial Economics’ terms in its report as “competing economic and conservation goals.” Newer approaches address forestry as a “triple-bottom-line” endeavor—one in which economy, environmental, and community (or equity) benefits are all a part and integrated. This approach is not about trading off
harvests at the expense of the environment, or environmental outcomes with community and economic interests, but integrating them in ways that advance them collectively. The tenets of what Industrial Economics calls “ecological forestry” discussed in the report are suggestive, but remain too narrow as presented.

Note from Sharon: So the topic of job losses in the PNW has been discussed heatedly since I left there in the 80s. In the interest of understanding the impacts of the proposed action, it seems like this is of enough importance that I would yard up the economists in the PNW area who have worked on it to review it, and have the discussion in a public forum. The stakes are too high for any lesser form of information.

I also have to wonder why this group was chosen to do the analysis. Did more local economics groups not compete? Did they ask for too much money?

My main experience with large EIS’s (and longest!) was Colorado Roadless. I can’t imagine contracting something that size and complexity (spotted owl, across states) nto an outfit that is potentially starting from scratch. But maybe I’m missing something. I also hope the economists at the state universities were involved in reviewing.. it would be good to see the reviews and how the comments were responded to in a public venue.

9 thoughts on “Sierra Institute’s Response to the Economic Analysis of the Critical Habitat Designation for Northern Spotted Owl”

  1. This long and detailed (30 MB file) is filled with statistics that tend to glaze the eyes, but it does confirm what most of us who have some formal training in sociology have long known. EISs by federal agencies, while paying careful attention to animals, birds, plants, and scenery are woefully short on identifying and articulating the impacts of proposed actions on people.

    I was struck, but not surprised, by the similarity of the study’s findings (inadequate analysis of socio-economic impacts by an agency-sponsored study) with my findings in regard to the U.S. Forest Service analysis of red-cockaded woodpecker impacts on the Liberty County School District here in Florida. The web-page consists mainly of excerpts from a 1999 claim by the School District made in behalf of the Children of Liberty County against the U.S. Forest Service. It lists some of the actual quantified impacts that resource non-management has had, and is having, on the children of that county. Not a happy story.

  2. For another perspective, see Ernie Niemi, 2012. Comments on Draft Economic Analysis of Critical Habitat, Northern Spotted Owl. Natural Resource Economics, Inc. prepared for American Bird Conservancy. July 2012, revised August 2012.

    Summary of Findings:
    “The Draft Analysis narrowly focuses on how the designation of critical habitat
    would affect the timber industry, disregarding its other effects on the economy. … Extensive
    evidence confirms that timber constitutes a small percentage of the total value of
    goods and services provided by forests in this region. With its limited focus and
    pro-timber bias, the Draft Analysis cannot provide the Secretary with a solid
    foundation for weighing the full economic benefits of designating lands against
    the full economic benefits of excluding them.

    “The Draft Analysis misconstrues the designation’s timber-related benefits. The
    Draft Analysis measures the benefits of increased timber production with one eye
    closed, looking only at the market value of the additional logs and ignoring the
    costs of producing them….”

  3. Interesting.. it sounds like they might be in agreement that timber is now a small percentage of the value provided. While possibly disagreeing on whether this is an improvement or not.

    Here’s what I found about the author:
    the MCRP degree is a masters in city and regional planning.

    Oh, here’s Kusel’s bio

    Dr. Jonathan Kusel

    Dr. Jonathan Kusel founded and has for 18 years directed the nonprofit Sierra Institute for Community and Environment in Taylorsville, California. He left academia to found the Institute, which focuses on the human-natural resource interaction focusing on research, education and project implementation. Dr. Kusel participated on the Clinton administration’s Forest Ecosystem Management Assessment Team; participated on the core team and led the community assessment team and public participation team for the Sierra Nevada Ecosystem Project (SNEP); and led a national assessment of the Secure Rural School and Community Self-Determination Act, which contributed to refinement and passage of new legislation. He has launched watershed groups and is currently involved in establishing watershed-based pilot ecosystem service assessments. He recently completed assessments that helped launch the Burney-Hat Creek Community Forest and Watershed Group and is currently working with groups to advance the use of biomass to restore forests and local resource economies. Dr. Kusel received a bachelor’s degree from Oberlin College, a master’s degree in forest science from the Yale School of Forestry & Environmental Studies and a doctorate in natural resource sociology and policy from the University of California, Berkeley

    Now,my question is where are the forest economists (employed by the state universities) in all this? I hope the taxpayer is getting some help from them as this critical decision on critical habitat is made…

  4. Sharon: The forest economists are hiding under the Acknowledgements section of the initial study. Norm Johnson, well known forest economist employed by Oregon State University where he helped make the plan for spotted owls and the NW Forest Plan, apparently had the lead.

  5. Thanks, Bob, for catching this…
    Here’s a link to the original (May 2012) Industrial Economics study,.

    The effort was directed by Service staff in Regions 1 and 9 with significant additional technical support provided by the Oregon Fish and Wildlife Office.

    Advice and guidance on this report was provided by K. Norman Johnson, University Distinguished Professor, Oregon State University College of Forestry. In addition, Dr. Randal Rucker, Professor, Department of Agricultural Economics and Economics, Montana State University provided technical review of the draft analysis.

  6. The comments reveal that the readers missed the whole point of the original critique – the failure of the EIS to consider social (not economic) impacts . The blogs are all about economics: goods and services, timber value, market value, cost, value provided, dollars, industry. We’ve uncovered where the economists were hiding. Where were the social scientists – the social psychologists and sociologists who could have revealed what impacts proposed spotted owl management would have on people, the families, the communities, schools and the future of the children who attend them. These real and never considered impacts, some of which are listed in my previously cited website, flow from economic impacts. They are the all-important ends towards which economic (and all other) means are directed.

    And if the social scientists were hiding in the acknowledgement section along with the economist, what happened to their input?

  7. Thanks Mac, somehow I assumed that there was a separate social assessment and that the Industrial Economics report was only the economic assessment. That’s all it says it is in the title “Economic Assessment”. so there should be a social assessment also out there somewhere..

    • Mac: One reason I didn’t notice the lack of sociologists is my personal bias that tends to lump them in with economists and other statisticians. I do believe people are being kept out of this process and — more importantly — during analyses such as these. Where are the cultural anthropologists, for an assessment of current local family and community values? Where are the historical ecologists, for a reasoned consideration of the documented ecological impacts of humans in the environment? Those are the people (and scientific insights) that I miss.

  8. The critical factor is indeed that something is missing, and scientists, Fish and Wildlife Service and Industrial Economics should know better. This is not about pitting one scientist or subject area against another. A good economist can do a broad assessment that’s inclusive of critical social components, as can a good sociologist conduct the needed economic analysis. Alternatively, a good assessment will include necessary disciplines and meaningfully integrate them (a real challenge to be sure). It’s why I referred to the work as a socioeconomic analysis. Until we get there–accepting the need for a broader, more inclusive assessment– critical dimensions will continue to be ignored.


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