Costs and regional impacts of restoration thinning programs on the national forests in eastern Oregon

An intertemporal spatial equilibrium model of the eastern Oregon softwood log market was employed to estimate the market and economic welfare impacts of restoration thinning programs established on national forests in the region. Programs treated only lands with sawtimber thinning volume and varied by the extent of public subsidies for costs, the types of costs that could be subsidized, and the form of the subsidy payment. Impacts on private harvest timing, numbers of mills, and postprogram log prices in the region were found to vary markedly with the form of the program. Log consumers (lumber mills) consistently realized relatively large surplus gains, while private log producers' surplus showed smaller but consistent losses. For a comparable subsidy budget, programs that subsidized only hazard removal costs, on sites where net unsubsidized sawtimber returns promised to be less that these costs, led to a larger area treated than did programs with more flexible subsidy conditions. Across all programs, net agency receipts from sawtimber sales were estimated to be insufficient to cover the costs of all areas in need of thinning treatment (lands with and without sawtimber thinning volume).