Economic Impacts of Controlling Soil-Loss from Silviculture Activities: A Case STudy of Cherokee County, Texas

Section 208 of the 1972 Amendments to the Federal Water Pollution Control Act (Public Law 92-500) requires the states to develop plans which: (1) contain processes to identify nonpoint sources of pollution, and (2) set forth procedures and methods to control such sources of pollution to the extent feasible.

Among the land use activities which are explicitly identified within Section 208 as potential sources of nonpoint pollution problems is silviculture. Texas, since it contains an estimated 12.5 million acres of commercial forest land (Murphy, 1976), has for some time been actively involved in developing the required planning procedures and materials. This document represents one component of this overall planning process.

The "extent feasible" clause of Section 208 can be interpreted as recognizing the need to consider economic tradeoffs in reaching a decision as to what level of control, if any, should be exercised to limit nonpoint source pollution from whatever type of activity. This would seem to be a reasonable interpretation since it would be illogical to envision extending controls to the point that their marginal costs would exceed their marginal benefits.

Broadly conceived, the purpose of this investigation has been to make a first approximation of the economic tradeoffs that would be associated with any effort to limit the extent of nonpoint pollution resulting from silvicultural activities in Texas. More specifically the study has sought to achieve the following objectives:

1. To develop a methodology For assessing the economic impacts associated with imposing alternative silvicultural nonpoint source controls at varying intensities.
2. To demonstrate how the methodology could be applied to a specific study area to facilitate decision-making about the economic rationality of imposing controls.

As the study plan for this project was developed, choices had to be made regarding the range of potential pollutants to consider, the range of alternative control techniques to consider, and the range of economic impacts to consider. Since the nature of these choices represent limitations on the scope of the project, they should be made explicit from the outset.

As regards the range of potential pollutants considered, it is recognized that silvicultural nonpoint source pollution can conceivably assume a variety of forms -- nutrients, chemical, thermal, and so on. Nonetheless, in this investigation sediment is the only potential silvicultural pollutant which has been addressed -- and this only indirectly.1 The focal point of the analysis is on the economic impacts of restricting soil loss (i.e. sheet and rill erosion) which is not directly equivalent to sediment yield. Conversion of soil loss figures to sediment yield figures requires knowledge of an appropriate sediment delivery ratio.

While this might appear to be a significant limitation of the study, the investigators are of the opinion that it is not. This conclusion rests upon essentially two facts. First, the bulk of the available evidence pertaining to the potential impacts of silvicultural activities on water quality indicates that in those instances where such activities appear to be creating a problem sediment is generally the potential pollutant of greatest importance. Secondly, sediment yields will bear a constant proportional relationship to soil loss. Indeed, if the study unit used in this investigation had been a physical watershed instead of a county, the analysis could have dealt directly with sediment yields rather than soil loss.2 In turn, if actual sediment yields had been estimated, other potential pollutants could have been introduced into the analysis, if so desired, by the use of appropriate loading functions.

As regards the range of alternative control techniques that might conceivably be used to limit silvicultural nonpoint source pollution, this investigation specifically considers four possibilities. These are: (1) a countywide limit on allowable soil loss, (2) a per acre limit on allowable soil loss, (3) a tax on excess soil loss, and (4) a subsidy for reduced soil loss. While other policy choices undoubtedly exist, these four alternatives are felt to encompass a fairly broad range of possibilities. Accordingly, this limitation on the scope of the study is not perceived to be a serious deficiency.

Finally, as regards the range of economic impacts considered, the present investigation explicitly deals with the impacts of the various alternative control techniques on aggregate income to forest landowners, levels of timber production, and governmental tax revenues or subsidy expenditures. While these items represent a fairly broad range of impacts, they do not completely exhaust the full array of factors which ideally should be considered. Among the relevant variables which have not been dealt with are: (1) off-site damages averted by reduced soil loss and consequent sedimentation, (2) governmental administrative or enforcement costs, (3) indirect or induced economic impacts attributable to an increase or decrease in landowner income or timber output, and (4) the equity implications of silvicultural nonpoint source controls.

Failure to consider the full range of benefits and costs is unquestionably a significant limitation associated with the present investigation. Its practical importance is to complicate the task of drawing inferences about the economic rationality of imposing controls. In this study, time and data limitations were the primary reasons for restricting the range of economic variables considered. In future investigations of this type, if study areas are carefully chosen, it may be possible to estimate off-site damages using a procedure developed by Lee and Guntermann (1976). In addition, Everett and Miller have shown how the indirect or induced economic impacts associated with the imposition of silvicultural controls can be estimated if a regional "Input-Output" model is available for the study area (1975). These types of technical improvements should be introduced in the future. However, it is the opinion of the investigators that the methodology as developed and used in this study can still serve as a valuable aid to rational decision-making.

The techniques that are described in this report entail additional limitations beyond those already identified. Prospective users need to be aware of these limitations, but it is felt that any discussion of them is best deferred until after the methodology itself has been presented. At this point the reader will be in a better position to evaluate their significance.

The material in the remainder of this report has been organized around four chapters. The first describes the study area, giving special attention to the nature of the forest resource base. The second sets forth the methodology for economic impact assessment that was developed as part of this project. The third presents the results obtained by applying the chosen methodology to the selected study unit. Finally, the last chapter sets forth some concluding observations about the remaining methodological limitations previously referred to, future research needs, and the economic rationality of imposing silvicultural nonpoint source controls within the study area.