USDA Forest Service Economic Impact Analysis

Economic and Ecosystem Service Analysis – Applications for Forest Planning

The Ecosystem Management Coordination staff currently supports economic impact, contribution and efficiency analysis as well as protocols for assessing ecosystem services.

Economic Impact and Contribution Analysis

The USDA Forest Service has a multiple-use mission to manage various forest resources such as timber, recreation, range, minerals, wilderness, fish, and wildlife, state and private forestry programs, etc. The Forest Service has used the input-output model, IMPLAN (IMpact analysis for PLANning) to assess the economic significance of various programs and activities at national, regional and forest levels. IMPLAN was originally developed by the Forest Service in the 1980’s to estimate the economic impact of land management planning. Since the 1990’s IMPLAN has been privatized, managed, and enhanced by the Minnesota IMPLAN Group (now named the IMPLAN Group LLC). The Forest Service uses the IMPLAN database and modeling system to carry out economic impact studies of the consequences of Agency decisions and proposed actions and to describe the current economic contribution of natural resource management on the National Forests and Grasslands.

Over many years, the Forest Service economics community has addressed changing economic issues by developing and updating a suite of tools, methods, data, and training. IMPLAN “out of the box” is a very generic economic impact modeling system so the Forest Service has invested in add-on applications using Microsoft Excel tailored to the requirements of Forest Service planning, research and policy analysis. A suite of tools has been developed and used for economic impact analysis in many applications, among them; affected environment analysis, forest and project planning, rural community diversity and dependency analysis, strategic planning, policy analysis, monitoring and recently for supporting the American Recovery and Reinvestment Act effort. In addition, these tools have been used by the Department of Interior (DOI) to analyze the economic contribution of DOI programs, management, and stimulus investments and by DOI Bureau of Land Management for several resource management plans.

Economic Efficiency Analysis

Management of natural resources is an investment for current and future benefits to society. Quick-Silver is a program developed and supported by the Forest Service for economic analysis of long-term, on-the-ground resource management projects. It provides a consistent benefit/cost framework to determine if one management action costs less or has a better payoff than others. Quick-Silver standardizes economic analyses by creating and sharing standard project files containing one or more management alternatives for comparison. It uses a set of default management activities defined by the user.

Quick-Silver calculates economic criteria such as present net value, benefit/cost ratio, annual equivalent value, and internal rate of return. Projects with multiple investment partners or participants can be analyzed. Printed reports show cash flow details, economic returns, and summaries of costs and benefits that make up project alternatives.

Some typical Quick-Silver applications are:

  • Comparison of forest management treatments,
  • Valuation of benefits or losses,
  • Recreation developments and business plans,
  • Evaluation of access and road strategies,
  • Analysis of grazing and range alternatives, and
  • Assessment of habitat improvements.

Ecosystem Services - Benefits to People

Definitions used in the 2012 Planning Rule, benefits people obtain from ecosystems include:

  1. Provisioning services, such as clean air and fresh water, fuel, forage, fiber, and minerals;
  2. Regulating services, such as long term storage of carbon; climate regulation; water filtration;
  3. Supporting services, such as pollination, seed dispersal, soil formation, and nutrient cycling;
  4. Cultural services, such as educational, aesthetic, spiritual and cultural heritage values, recreational experiences and tourism opportunities.

    Ecosystem services can be used to develop more transparent and acceptable plans (and projects) by:
    1. Facilitating public participation/collaboration
    2. Linking assessments with the development of plan components
    3. Articulating and integrating roles and contributions, planning components, and monitoring indicators
    4. Evaluating project outcomes (NEPA)
    5. Identifying gaps or uncertainty about production functions
    6. Attracting potential partners

Resources

Social and Economic Sustainability and Vulnerability

The 2012 National Forest System Land Management Planning Rule requires that forest plans guide management of National Forest System lands so they are ecologically sustainable and contribute to social and economic sustainability.

Forest planning teams have flexibility in deciding how to assess contributions to social and economic sustainability, and a number of methods and indicators are available to choose from. An overarching theme is that indicators, should move beyond traditional metrics of economic growth (such as jobs, income, and GDP). The Montreal Process Criterion 6 indicators and measures from the Inclusive Wealth Index are examples of existing frameworks that can be used to demonstrate how forest plans guide contributions to social and economic sustainability. These approaches allow planning teams to customize assessments to their forest-specific conditions, reflect available data, and account for communities of interest or other descriptions of social or economic conditions.

Additional guidance and advice is available for addressing social and economic sustainability in forest plan components and environmental analyses for Forest planning (see contact below).

Vulnerability assessments provide valuable information about the extent to which forest resources, as well as beneficiaries (e.g., communities and local economies) are at risk from hazards such as climate change, insects and disease, and severe fire. The results of vulnerability assessments can help flag forest contributions and beneficiaries of greatest concern, and therefore help focus assessments of sustainability in forest planning. Technical advice and examples of indicators that account for social and economic vulnerability are being developed.

These tools are currently maintained and supported by economics staff members from Ecosystem Management Coordination (EMC) in Fort Collins, Colorado. For more information, please contact Caleb O’Kray (cokray@fs.fed.us).

For an example of the use of economic analysis for forest planning under the 2012 Forest Planning Rule, please see the Final Environmental Impact Statement, Flathead National Forest, starting on page 185 of Volume II. For an example of economic analysis under the previous Forest Planning Rule, see the Final Environmental Impact Statement, Shoshone National Forest Plan Revision, starting on pg. 1126.

USDA Forest Service
Ecosystem Management Coordination (EMC)
1400 Independence Ave.
Mailstop: 1104
Washington, DC 20250-1104

(202) 205-0895

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Location: https://www.fs.fed.us/emc/economics/applications.shtml
Last modified: Thursday, 20-Sep-2018 10:29:22 CDT