Economics

Economics

Great Basin ecosystems provide a variety of environmental benefits including “use” values such as recreation and ranching, and “non-use” values such as preservation of endangered species, cultural heritage, and bequests for future generations. SageSTEP economists have been working to understand the connection between these values and land management decisions to use (or not use) different types of fuels treatments. Economics research focuses on four areas:

1. Wildfire suppression costs averted.  When fuels treatments are effective in reducing the number and intensity of future wildfires, the costs that would have been incurred fighting these fires are saved. It is widely recognize that pre-fire vegetation treatment can cut these very substantial costs. In four out of the seven years between 1999 and 2006 the BLM and US Forest Service spent more than $1 billion suppressing wildfires. SageSTEP economists are working to find which fuels treatments, applied under what conditions will bring the greatest savings.
2. Valuation of ecological goods and services.  Ecosystem services are assigned a dollar value by assessing community members’ willingness to pay for them. SageSTEP economists surveyed households across the Great Basin region, finding that the general public is willing to pay $38-$52 per household per year to support treatments to prevent further loss of ecosystem function and to restore damage already done.
3. Ranch-level benefits.  Many individuals involved in livestock production own large tracts of land that could benefit from vegetation treatments. However, SageSTEP economists have found that for most ranchers, the cost of treatments is higher than both the actual return to their operation and their willingness to pay.
4. Deviation between ranch incentives and social benefits.  Researchers have discovered that although the general public is willing to pay to protect Great Basin ecosystems, ranchers have little incentive to pay for the implementation of treatments on their private land.

It is clear that the costs of wildfire suppression saved by preventative fuels treatments such as prescribed burns and mechanical removal can be quite significant, especially when treatments are applied in the early stages of ecosystem degradation. Nonetheless, treatments frequently are not applied on private land because the ranch-level benefits do not equal the larger societal benefits provided by the treatments. Ranchers are often unwilling or unable to pay for costly fuels treatments that are beneficial to the greater ecosystem and society, but which bring little financial gain to the ranch itself, and sometimes result in short-term losses. This disconnect could be addressed through the public subsidization of vegetation treatments on private lands or other policies designed to align public willingness to pay with the private cost to ranchers. SageSTEP economists hope to provide insights that will help to create more cost effective ecosystem management to acheive healthy landscapes across the Great Basin.

Publications related to economics research can be found on our SageSTEP Publications page.

To view a presentation summarizing the four components of the SageSTEP economics research, click on the links below.

Kim Rollins, Economist

Click here for a PDF version of the PowerPoint.