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A procedure for economic analysis in forest resource planning at the operational level : a case study… Kofoed, Peter James 1978

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A PROCEDURE FOR ECONOMIC ANALYSIS IN FOREST RESOURCE PLANNING AT THE OPERATIONAL LEVEL; A CASE STUDY ON THE SEYMOUR RIVER RESOURCE FOLIO OF THE KAMLOOPS FOREST DISTRICT by PETER JAMES KOFOED B.For.Sc., U n i v e r s i t y o f Canterbury, N.Z., 1972 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE i n THE FACULTY OF GRADUATE STUDIES ( F a c u l t y of F o r e s t r y ) We accept t h i s t h e s i s as conforming to the r e q u i r e d standard THE UNIVERSITY OF BRITISH COLUMBIA A p r i l 19 78 © Peter James Kofoed,. 1978 In p r e s e n t i n g t h i s t h e s i s in p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e that the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . It i s u n d e r s t o o d tha t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f F~<Oc-e.s\r^ The U n i v e r s i t y o f B r i t i s h C o l u m b i a 2075 Wesbrook P l a c e V a n c o u v e r , Canada V6T 1W5 ABSTRACT S u p e r v i s o r : P r o f e s s o r D. Haley Economic a n a l y s i s o f f o r e s t management a l t e r n a t i v e s c o u l d p l a y an important and u s e f u l r o l e i n f o r e s t r e source p l a n n i n g i n B r i t i s h Columbia. The need f o r economic e v a l u a t i o n i s emphasised by the i n c r e a s i n g number of resource c o n f l i c t s r e s u l t i n g from the dominance of the timber i n d u s t r y i n the economy, the growing importance o f other f o r e s t resource uses and the i n c r e a s i n g awareness of the consequences o f d i s t u r b i n g the f o r e s t e n v i r o n -ment. Th i s t h e s i s has developed a procedure f o r i n c o r p o r a t i n g economic a n a l y s i s i n t o the o p e r a t i o n a l l e v e l of f o r e s t resource p l a n n i n g . An examination of h i s t o r i c a l and c u r r e n t p l a n n i n g proce-dures showed a l a c k of economic i n p u t . D i r e c t a p p l i c a t i o n o f the economic theory o f resource a l l o c a t i o n was found t o be i m p o s s i b l e because o f market imperfections> the absence of "markets values f o r many f o r e s t r e s o u r c e • v a l u e s , and because o f inadequate knowledge o f the f o r e s t environment. The a v a i l a b i l i t y o f timber monetary v a l u e s and shadow-p r i c i n g techniques was r e l i e d upon f o r f o r m u l a t i o n o f the procedure. Improved ac c o u n t i n g systems f o r timber c o s t s and i n c r e a s e d experience w i t h , and s o p h i s t i c a t i o n o f , shadow-pricing methods, should be s t r e s s e d t o achieve short-term gains i n the u s e f u l n e s s o f the procedure and the " q u a l i t y " o f the r e s u l t s . To meet t r a i n i n g , budget and i n f o r m a t i o n requirements, recommendations i n c l u d e emphasis on areas of severe r e s o u r c e c o n f l i c t s and where data i s a v a i l a b l e f o r thorough a n a l y s i s . The need to c o n s i d e r the s o c i a l impact of f o r e s t p l a n n i n g as w e l l as economic e f f i c i e n c y e f f e c t s was s t r e s s e d . S e v e r a l c r i t e r i a o f s o c i a l impact were p r o v i d e d . A major p a r t of the t h e s i s was a comprehensive a p p l i c a t i o n .of the procedure i n a case study of the Seymour R i v e r r e s o u r c e f o l i o i n the Kamloops F o r e s t D i s t r i c t . T h i s example showed the d i f f i c u l t y o f o b t a i n i n g d e f i n i t i v e s o l u t i o n s to f o r e s t r e s o u r c e c o n f l i c t s . However, wit h economic a n a l y s i s an i n c r e a s e d aware-ness o f other p o s s i b l e s o l u t i o n s to the management problem was o b t a i n e d , the r e l a t i v e importance o f the d i f f e r e n t r e s o u r c e v a l u e s became apparent, s e n s i t i v e v a r i a b l e s and data d e f i c i e n c i e s were i d e n t i f i e d , and management a l t e r n a t i v e s p r o v i d i n g i n c r e a s e d o v e r a l l b e n e f i t s became e v i d e n t . I t i s recommended t h a t readers whose prime i n t e r e s t i s i n the p r a c t i c a l a s p e c t s o f t h i s t h e s i s should c o n c e n t r a t e on Chapters VI and V I I ; the d e s c r i p t i o n o f the procedure f o r a n a l y s i s and the example. The e a r l i e r c hapters p r o v i d e the h i s t o r i c a l and t h e o r e t i c a l background. i v TABLE OF CONTENTS Page ABSTRACT i TABLE OF CONTENTS i v LIST OF TABLES v i i LIST OF FIGURES x LIST OF CONVERSION FACTORS x i ACKNOWLEDGEMENTS x i i CHAPTER I INTRODUCTION 1 CHAPTER I I HISTORICAL REVIEW OF FOREST RESOURCE PLANNING IN B.C 4 CHAPTER I I I CURRENT FOREST RESOURCE PLANNING SYSTEM IN THE KAMLOOPS FOREST DISTRICT . . . . . . . 11 1. Environmental P r o t e c t i o n Areas 11 2. R e f e r r a l s 12 3. Coordinated Resource P l a n s 14 4. Resource F o l i o P l a n n i n g System 15 5. Economic Input 17 CHAPTER IV ECONOMIC THEORY OF RESOURCE ALLOCATION . . 20 1. The M u l t i p l e Values of F o r e s t s 20 2. Welfare Theory 21 3. Problems of Market F a i l u r e and Inadequate . . . . Knowledge 2 4 a) Market i m p e r f e c t i o n s 24 b) E x t e r n a l i t i e s 24 c) P u b l i c goods 25 d) Imperfect knowledge 25 4. A v a i l a b i l i t y of Pecuniary Values 27 a) Timber i n d u s t r y 27 b) Non-market v a l u e s 29 c) D i s c r e t e a n a l y s i s 30 5. Dynamic A n a l y s i s 31 6. Summary of F a c t o r s A f f e c t i n g P r a c t i c a l i t y . . . of E f f i c i e n c y A n a l y s i s . 32 a) Market i m p e r f e c t i o n s 32 b) Information 33 c) D i s c r e t e a n a l y s i s 33 V Page CHAPTER V FOREST RESOURCE ALLOCATION AND INCOME DISTRIBUTION 34 1. P l a n n i n g O b j e c t i v e s 34 2. Who Pays the Cost o f Environmental C o n s t r a i n t s . . 35 3. Stumpage as a Measure of Economic Rent 38 4 . Geographical Aggregation and D i s t r i b u t i o n . . . . E f f e c t s 39 CHAPTER VI PROCEDURE FOR ECONOMIC ANALYSIS IN FOREST RESOURCE MANAGEMENT AT THE OPERATIONAL LEVEL 43 1. L e v e l s o f F o r e s t Resource P l a n n i n g 43 a) P r o v i n c i a l and r e g i o n a l l e v e l s o f p l a n n i n g . . 43 b) Submanagement u n i t and o p e r a t i o n a l l e v e l s o f p l a n n i n g 44 2 . A d m i n i s t r a t i o n and Information Costs 45 3 . Model f o r I n t r o d u c i n g Economic A n a l y s i s i n t o F o r e s t Resource P l a n n i n g 48 CHAPTER VI I EXAMPLE OF ECONOMIC ANALYSIS OF ENVIRONMENTAL CONSTRAINTS: THE SEYMOUR RIVER RESOURCE FOLIO 57 1. I n t r o d u c t i o n . 57 2 . Environmental C o n s t r a i n t s 59 a) F e d e r a l f i s h e r i e s 59 b) F i s h and w i l d l i f e branch 60 c) P r o t e c t i o n 61 d) R e c r e a t i o n 61 3 . The Normal Oper a t i o n S i t u a t i o n . . 62 4 . S i g n i f i c a n t Environmental C o n s t r a i n t s 62 5. Management A l t e r n a t i v e s . . . . 6 3 6 . H a r v e s t i n g Schedules and Timber Cost Elements and Discount Rate 64 7. O p p o r t u n i t y Costs f o r Timber Values Foregone . . 6 6 a) E f f e c t on a l l o w a b l e c u t 66 i ) F u l l volume commitment 66 i i ) Determination of foregone a l l o w a b l e c u t . 6 6 i i i ) Foregone stumpage 70 i v ) Employment, value added and government revenues 70 v) Sources o f e r r o r - s e n s i t i v i t y a n a l y s i s . 72 b) S e l e c t i o n l o g g i n g 75 i ) F o r e s t management c o n s i d e r a t i o n s . . . . 76 i i ) Merchantable volumes 77 i i i ) Timber h a r v e s t i n g c o s t s 77 i v ) S e n s i t i v i t y a n a l y s i s 81 v i Page c) Roading . 83 i ) B a s i c assumptions 84 i i ) Procedure 85 i i i ) R e s u l t s 87 i v ) S e n s i t i v i t y a n a l y s i s . 87 d) Hauling c o s t s 90 i ) Data and assumptions used 91 i i ) R e s u l t s 91 i i i ) S e n s i t i v i t y a n a l y s i s 91 e) D i r e c t i o n a l f a l l i n g 92 f) Marking . . . . . 93 g) Adverse s k i d d i n g 9 4 h) Summary of foregone timber v a l u e s 95 8. Other F o r e s t Resource Values . . . . 98 a) Moose valu e s 9 8 b) Salmon v a l u e s 9 9 i ) Impacts of l o g g i n g a c t i v i t y d u r i n g the i n c u b a t i o n p e r i o d of salmon (with s p e c i a l r e f e r e n c e to the Seymour R i v e r spawning ground) 99 1) E f f e c t s of l o g g i n g on sediment . . . . 101 2) E f f e c t s of l o g g i n g on stream temperature 101 3) E f f e c t s of l o g g i n g on oxygen l e v e l s . . 102 4) E f f e c t s of l o g g i n g on stream flow . . . 103 5) Examination of environmental c o n s t r a i n t s 104 i i ) P o p u l a t i o n i n f o r m a t i o n . 106 i i i ) P a r t i a l h a b i t a t a n a l y s i s 107 i v ) S u b j e c t i v e p r o b a b i l i t i e s . . . 108 v) Salmon v a l u e s 110 v i ) Four year c y c l e 111 v i i ) R e s u l t s - p r e s e n t v a l u e s of salmon c o s t s (at 10%) 112 v i i i ) D i s c u s s i o n of r e s u l t s 113 9. D i s c u s s i o n o f Economic E f f i c i e n c y of Resource A l l o c a t i o n - S a l m o n and Timber Values 117 10. Q u a l i t a t i v e Comments on Other Resource Values . . 121 11. S o c i a l Impacts 122 12. C o n c l u s i o n . 124 CHAPTER V I I I CONCLUSIONS AND RECOMMENDATIONS 128 LITERATURE CITED 134 APPENDIX I . . 140 APPENDIX I I 146 v i i Page APPENDIX I I I 151 APPENDIX IV '. 159 APPENDIX V 160 APPENDIX VI 163 v i i i LIST OF TABLES Table Page 1 B a s i c h a r v e s t i n g schedule 65 2 Reserve s t r i p : merchantable volume i n m3 67 3 Reserve s t r i p : f o r e s t s i t e s by area and merchantable volume 6 8 4 Reserve s t r i p : M . A . I . — a l l o w a b l e c u t 68 5 M ± and M 2 a r e a s : merchantable volumes (m 3). . . . 69 6 Present values of foregone stumpage: management a l t e r n a t i v e s a and c 70 7 Species composition and volumes i n comparable stands: r e s e r v e s t r i p and nearby cut p e r m i t s . . . 77 8 Relevant diameter d i s t r i b u t i o n i n f o r m a t i o n f o r s e l e c t i o n l o g g i n g 78 9 E f f e c t of percentage decay on h a r v e s t i n g c o s t per m3 o f firmwood. 79 10 Percentage decay i n c l e a r c u t and s e l e c t i o n o p e r a t i o n s 80 11 Present v a l u e s of s e l e c t i o n b e n e f i t s i n M 2 areas 81 12 Example o f d e t e r m i n a t i o n of p r e s e n t v a l u e r o a d i n g c o s t s 85 13 R e l a t i v e p r e s e n t v a l u e r o a d i n g c o s t s f o r management a l t e r n a t i v e s 86 14 Area o f machine b u f f e r s t r i p a d jacent to the Seymour R i v e r . 92 15 Present v a l u e s of d i r e c t i o n a l f a l l i n g c o s t s . . . . 93 16 S t a t i s t i c s on Seymour sockeye p o p u l a t i o n 1962-1975 106 17 P r o b a b i l i t y matrix f o r r e d u c t i o n i n salmon c a t c h . 108 18 Present v a l u e s of salmon c o s t s f o r timber h a r v e s t i n g p r e s c r i p t i o n s ( d i m i n i s h i n g harm to salmon f o r three years a f t e r logging) 112 i x Table Page 19 Present v a l u e s of salmon c o s t s f o r timber h a r v e s t i n g p r e s c r i p t i o n s ~(no .decrease i n harm to salmon f o r three years a f t e r logging) 113 20 D i r e c t employment i n the B.C. f o r e s t i n d u s t r y 1965-1974. 141 21 D i r e c t employment i n the f o r e s t i n d u s t r y — Kamloops F o r e s t D i s t r i c t 1967-1976 143 22 Average value added (per m3) o f l o g s h a r v e s t e d — B.C. f o r e s t i n d u s t r y 1965-1974 147 23 Average v a l u e added (per m3) o f lo g s h a r v e s t e d — B.C. l o g g i n g and wood p r o c e s s i n g i n d u s t r i e s 1965-1974. 148 24 B.C. F o r e s t S e r v i c e revenues 1965-1976 152 25 F e d e r a l taxes from the B.C. f o r e s t i n d u s t r y 1969, 1971 and 1972. . 154 26 P r o v i n c i a l revenues from the B.C. f o r e s t i n d u s t r y 1969, 1971 and 1972 154 27 Firmwood timber h a r v e s t i n g c o s t s 162 X LIST OF FIGURES F i g u r e Page 1 Timber h a r v e s t i n B r i t i s h Columbia 1915-1975 . . . . . . • v 5 2 I l l u s t r a t i o n o f the importance o f assumptions on the impact of l o g g i n g a c t i v i t y on salmon v a l u e s . 114 3 P r o f i l e s f o r r e d u c t i o n i n salmon val u e s f o r f i r s t l o g g i n g pass 115 4 D i r e c t employment i n the B.C. f o r e s t i n d u s t r y 1965-1974 (man-years/1,000m 3). . 142 5 Value added per m3 of logs h a r v e s t e d B.C. f o r e s t i n d u s t r y 1965-1974 149 6 Average B.C. F o r e s t S e r v i c e revenues 1965-1976 ($/m 3). . . . . . . . 153 7 L o c a t i o n o f Seymour R i v e r Resource F o l i o . . . . . 164 8 Seymour R i v e r Resource F o l i o : environmental c o n s t r a i n t s and l o g g i n g zones . -4-&Er~ LIST OF CONVERSION FACTORS To c o n v e r t : Centimetres (cm) Metres (m) Kilom e t r e s (km) Hectares (ha) Square k i l o m e t r e s (km2) Cubic metres (m3) Cubic metres/ hectare (m3/ha) Kilogrammes (kg) Into: inches chains m i l e s a c r e s square m i l e s c u b i c f e e t c u b i c f e e t / acre pounds M u l t i p l y by 0 * 3 9 4 0 * 0 5 0 * 6 2 2 2 * 4 7 1 0 * 3 8 6 3 5 * 3 5 1 1 4 * 2 9 2 2 * 2 0 4 6 S l i g h t e r r o r s i n the c a l c u l a t i o n s are mainly due to rounding e r r o r s i n c o n v e r t i n g from i m p e r i a l to m e t r i c u n i t s . ACKNOWLEDGEMENTS I wish to acknowledge the a s s i s t a n c e and advic e o f the many people who made t h i s t h e s i s p o s s i b l e . In p a r t i c u l a r , g r a t i t u d e i s expressed f o r the support and p o s i t i v e c r i t i c i s m p r ovided by my s u p e r v i s o r , Dr. D. Haley, and f o r the guidance and h e l p f u l comments of my committee members, Drs. P.L. C o t t e l l and J.H.G. Smith. S p e c i a l thanks are due to Mr. R. Hughes of the B r i t i s h Columbia F o r e s t S e r v i c e a t Kamloops f o r the o p p o r t u n i t y to pursue the s u b j e c t . The a s s i s t a n c e and i n f o r m a t i o n p r o v i d e d by other F o r e s t S e r v i c e s t a f f at Kamloops i s g r e a t l y a p p r e c i a t e d . My g r a t i t u d e i s a l s o extended to the per s o n n e l o f the v a r i o u s resource agency o f f i c e s who k i n d l y provided i n f o r m a t i o n and a d v i c e . These i n c l u d e the B.C. F o r e s t S e r v i c e and the Environmental Land Use Committee S e c r e t a r i a t i n V i c t o r i a , the F i s h and W i l d l i f e Branch and Canada Manpower i n Kamloops, the F e d e r a l F i s h e r i e s S e r v i c e i n Kamloops and Vancouver, the C o u n c i l of F o r e s t I n d u s t r i e s o f B.C. i n Vancouver and the I n t e r n a t i o n a l P a c i f i c Salmon Commission i n New Westminster. 1 CHAPTER I INTRODUCTION The recent history of forestry i n B r i t i s h Columbia has displayed the increasing awareness and concern of man for his physical environment. The B r i t i s h Columbia Forest Service (B.C.F.S.) has i n t r o -duced techniques for including the requirements of other forest resource uses and values i n the planning process. These proce-dures were introduced on the premise that any additional protection to the environment was worthwhile as long as s u f f i c i e n t timber was s t i l l a vailable to maintain ex i s t i n g i n d u s t r i a l capacity. B i o l o g i c a l protection within technical c a p a b i l i t y appeared to be the goal. Economic analysis or even conjecture on the f i n a n c i a l impact of these environmental guidelines and constraints on forestry, the most important i n d u s t r i a l sector i n the B.C. economy, was, and s t i l l i s , l a r g e l y absent from B.C.F.S. and other forest resource agency procedures. It has been l e f t to the p o l i t i c a l process, market conditions and f i e l d administration to f i n d some sort of balance i n the a l l o c a t i o n of forest land resources. This vacuum of economic input exists even though costs for environmental constraints are high. In 1973 these costs were estimated as an average of $2.01 per m3 or a P r o v i n c i a l cost i n the order of $100 m i l l i o n per year (Council of Forest Industries, 1975). Important questions on whether these large costs are returned i n environmental benefits remain unanswered. The main objective of t h i s thesis i s to develop a procedure 2 f o r u s i n g economic a n a l y s i s i n f o r e s t r e s o u r c e p l a n n i n g at the o p e r a t i o n a l l e v e l . Of importance i s the example of a p p l i c a t i o n o f the procedure i n a f i e l d s i t u a t i o n . The study covers a wide range o f s u b j e c t matter i n economics and f o r e s t management and p l a n n i n g i n the development of the procedure. In the example the s u b j e c t s o f w i l d l i f e and salmon f i s h e r i e s are a l s o important. The aim i s to combine these d i f f e r e n t d i s c i p l i n e s i n t o a p r a c t i c a l and u s e f u l model, w i t h i n the c o n s t r a i n t s of poor data a v a i l a b i l i t y and the i m p e r f e c t i o n s o f theory. The study begins w i t h a g e n e r a l h i s t o r i c review o f f o r e s t r e s o u r c e p l a n n i n g i n B.C. To examine pres e n t procedures, a t t e n t i o n i s narrowed to t h a t of a c t i v i t i e s i n the Kamloops F o r e s t D i s t r i c t . In both, the absence o f economic i n p u t i n the p l a n n i n g process i s v e r y n o t i c e a b l e . The economic theory of r e s o u r c e a l l o c a t i o n i s d i s c u s s e d i n the context o f the "im p e r f e c t " c o n d i t i o n s e x h i b i t e d by f o r e s t r e s o u r c e s , the inadequacy o f i n f o r m a t i o n and the problems of a s s i g n i n g monetary val u e s t o some f o r e s t uses. I t i s concluded t h a t these d i f f i c u l t i e s do not exclude " u s e f u l " a p p l i c a t i o n s o f economic a n a l y s i s . The importance of the f o r e s t i n d u s t r y to the Pr o v i n c e and p a r t i c u l a r l y t o many smal l c e n t r e s , suggests t h a t changes i n timber supply and c o s t s c o u l d have s i g n i f i c a n t s o c i a l impact (B.C. M i n i s t r y o f Economic Development, 1976). D i s t r i b u t i o n a l , as w e l l as e f f i c i e n c y > i m p l i c a t i o n s o f environmental p l a n n i n g are important. D i s c u s s i o n i n c l u d e s examination o f who pays f o r environmental c o n s t r a i n t s and the d i s t r i b u t i o n a l s i g n i f i c a n c e of stumpage as a measure of economic r e n t and t h a t of g e o g r a p h i c a l 3 boundaries used i n a n a l y s i s . The concepts and l i m i t a t i o n s o f economic theory, a l r e a d y e s t a b l i s h e d i n d i s c u s s i o n , are used to d e r i v e a procedure f o r a p p l y i n g economic a n a l y s i s to environmental c o n s t r a i n t s a t the o p e r a t i o n a l l e v e l . The d i f f e r e n t f u n c t i o n s and requirements of f o r e s t environmental p l a n n i n g a t the r e g i o n a l and o p e r a t i o n a l l e v e l s are d i s c u s s e d . A l a r g e p a r t o f t h i s paper i s devoted to an example of the a p p l i c a t i o n o f the c o s t i n g procedures. The area s t u d i e d i s the Seymour Ri v e r r e s o u r c e f o l i o i n the Kamloops F o r e s t D i s t r i c t . 4 CHAPTER II HISTORICAL REVIEW OF FOREST RESOURCE PLANNING IN B.C. This chapter b r i e f l y traces the trend of increasing environmental concern from complete indifference through a period of preoccupation with timber management requirements to the present attempts at h o l i s t i c forest resource planning. Following t h i s are comments supporting the contention that there i s a serious lack of economic content i n the forest resource planning process. History The s i t u a t i o n p r i o r to 1900 i s best described by a quotation from the 1956 Royal Commission Report on the Forest Resources of B r i t i s h Columbia (Sloan, 1956, p.19) "The Royal Commission on Forestry of 1910 noted that i n the early days of the province timber lands seem to have had l i t t l e or no value i n the public estimation." The vastness of the forests and the sparse population and small i n d u s t r i a l demand did not require a concern with forest resource planning. As the 20th Century has progressed the volume of timber harvested has increased almost continually and often i n a dramatic fashion (Smith and Kozak, 1970). Volumes harvested today are ten times those logged i n 1915 and double those of 20 years ago (Figure 1). The small scale of pre-World War II operations i n the Interior and the rapid increases i n production i n the 1950s and 1960s are noticeable. Need for improved planning i s related to t h i s increasing rate of production and to changes i n the wealth and demands of the l o c a l population. 5 6 For t h i s paper two main periods may be defined. The f i r s t i s that p r i o r to the 1960s. This was a period of growing aware-ness of resource c o n f l i c t s r e s u l t i n g from production forestry practices. However forest planning continued to be concerned almost e n t i r e l y with timber. F u l l recognition and attention to other resource values—ranching, other agricu l t u r e , f i s h , w i l d l i f e and recreation was primarily through cooperation at the opera-t i o n a l l e v e l and to a limited extent through the statutes. The view that whatever was good for timber management was good for other resource values tended to p r e v a i l . For example, i n both the 1945 and the 1956 Royal Commission Reports on the Forest Resources of B r i t i s h Columbia (Sloan, 1945 and Sloan, 1956) the benefits of sustained y i e l d management for the protection of s o i l , water and w i l d l i f e were emphasised. Operational planning was concerned with environmental i n t e r -action only when i t coincided with factors d i r e c t l y a f f e c t i n g timber production. These factors included s i l v i c u l t u r e , f i r e control and slash disposal. A notable example i s the continuing search for better harvesting systems i n the I n t e r i o r . A number of harvesting systems and controls were t r i e d with the main aim of encouraging natural regeneration. These included a heavy emphasis on p a r t i a l cutting to a minimum diameter l i m i t and s e l e c t i v e marking. The problems of both i n cer t a i n forest types (Spruce—balsam i n particular) are discussed i n the 1956 Royal Commission Report (Sloan, 1956). Various c l e a r c u t t i n g patterns including narrow blocks and small patches were also t r i e d to enhance natural regeneration. These attempts at solving s i l v i c u l t u r a l and re-establishment problems through manipulation 7 of havesting systems and methods were larg e l y unsuccessful, often because of general application and lack of knowledge of s i t e and species differences (Smith and Clark, 1974 give a progress report of cutting t r i a l s i n i t i a t e d i n 1950). With greater harvesting mechanisation and the a v a i l a b i l i t y of nursery stock, c l e a r c u t t i n g became dominant i n the I n t e r i o r (1960s) except i n forest types suited to s e l e c t i o n logging (e.g. dry b e l t f i r ) . The second main period, which began i n the late s i x t i e s , heralded a growing environmental concern amongst the public. The requirements of f i s h , w i l d l i f e , recreation, water and other resource values i n the face of a large and growing timber industry received more attention. I t was time to consider these other resource values i n the forest planning process rather than simply dealing with them at an operational l e v e l as they arose and through l e g a l statutes (e.g. Federal Fisheries Act, R.S.C. 1970). As early as 1956 the r e f e r r a l system was introduced whereby the B.C.F.S. informed the federal f i s h e r i e s authorities of plans for harvesting near salmon streams. Clauses protecting the f i s h habitat could then be included i n the harvesting contract. This device has also been available to the Fish and W i l d l i f e Branch since 1970. I t was soon found that some means was required to reduce the administrative backlog and avoid the delays caused by the large number of requests made by the logging industry. A broader form of planning control, applicable to a l l tenures on Crown land was introduced with the Coast Logging Guidelines i n 1972 (B.C.F.S., 1972). These protective measures i d e n t i f i e d requirements for retaining protective forest cover, 8 r e s t r i c t e d the maximum s i z e o f c l e a r c ut openings and the percentage o f a stream o r l a k e face to be opened, and they s p e c i f i e d a l t e r n a t i v e patch c u t t i n g systems and the need f o r e x t r a c a re near streams ( i n c l u d i n g d i r e c t i o n a l f a l l i n g ) . General comments on road l o c a t i o n and de s i g n were a l s o i n c l u d e d . In the I n t e r i o r there has been a gr a d u a l implementation o f environmental g u i d e l i n e s . These have i n c l u d e d c u t b l o c k s i z e r e s t r i c t i o n s , machine b u f f e r s t r i p requirements and slope l i m i t a -t i o n s to ground s k i d d i n g . C o n s i d e r a b l e c r i t i c i s m f o l l o w e d from the f o r e s t i n d u s t r y t h a t these g u i d e l i n e s tended to be a p p l i e d i n f l e x i b l y r a t h e r than a c c o r d i n g t o s p e c i f i c s i t e c o n d i t i o n s . The B.C.F.S. r e c o g n i s e d t h i s shortcoming and has made attempts t o a l l o w more r e a l i s t i c e v a l u a t i o n s o f d i f f e r e n t s i t e c o n d i t i o n s . The c u r r e n t programme of i d e n t i f y i n g environmental p r o t e c t i o n areas i s an attempt to r e c o g n i s e p o t e n t i a l r e s o u r c e c o n f l i c t s and problem areas a t an o p e r a t i o n a l l e v e l (as w e l l as r e f i n e the a l l o w a b l e annual c u t c a l c u l a t i o n ) . I t r e a l i s e d the need to design a system f o r c o l l a t i n g the a v a i l a b l e r e s o u r c e and environmental i n f o r m a t i o n o f a p a r t i c u l a r area, and to formulate r e a l i s t i c plans on the b a s i s o f a l l r e s o u r c e v a l u e s . The r e s u l t i s the Resource F o l i o P l a n n i n g System i n t r o d u c e d i n 1973 ( B u l l e n , 1974). T h i s system and i t s c o u n t e r p a r t , the Coo r d i n a t e d Resource Management P l a n , and the r e f e r r a l system are d i s c u s s e d i n more d e t a i l i n the next chapter. Trends towards a more s i t e s p e c i f i c or problem o r i e n t e d approach to o b t a i n i n g the necessary f i e l d i n f o r m a t i o n f o r res o u r c e p l a n n i n g have been f r u s t r a t e d by the l a c k o f manpower 9 and money available to the Forest Service. The Royal Commissions on Forest Resources (Sloan, 1945, 1956 and Pearse, 1976) a l l discussed the problem. Pearse (1976) suggested delegation of operational r e s p o n s i b i l i t y to f i e l d personnel and the concentra-t i o n of planning e f f o r t on high p r i o r i t y problem areas to over-come t h i s deficiency. In summary, i t can be seen that forest resource planning i n B.C. has progressed from an early s i t u a t i o n of no planning through a considerable period of almost singular concern with timber requirements to a stage of f u l l recognition of other resource values and attempts to integrate them into the i n i t i a l planning process. More information i s needed now to make s i t e s p e c i f i c planning e f f e c t i v e . Economic Input The history of forest resource planning i n B.C. i s notable for an absence of economic evaluation. Sloan (1956) gives a description of the then current forest research. The emphasis was on f o r e s t biology, s i l v i c u l t u r e and forest products. There was l i t t l e examination of the economics of s i l v i c u l t u r a l prescriptions or of resource use c o n f l i c t s and environmental impacts of various operations. The lack of economic input i s also shown by the quest for harvesting systems and methods to provide adequate regeneration. The desire for "inexpensive" natural re-establishment has tended to push aside r a t i o n a l evaluation of a l t e r n a t i v e s . In the Interior during the 1950s, one p r e s c r i p t i o n was to clearcut i n narrow s t r i p s (40 to 100 m wide), running at r i g h t angles to the 10 logging roads. The r e s u l t was increased costs of road construc-t i o n and maintenance and a tendency to windblow (longer edge and funnel e f f e c t of narrow str i p ) without a guarantee of adequate regeneration. Recently a greater recognition has been given to the possible benefits of economic evaluation. The r o l e of economic input i n forest resource planning has been discussed by the B.C.F.S. (1976a) although to date l i t t l e action i s evident. Benskin (1975) estimated timber costs r e s u l t i n g from the 1972 Coast Guidelines. The Environment and Land Use - Committee Secretariat, i n conjunction with the Fisheries Service of Environment Canada i s currently (1978) analysing the economic impacts of the salmonid enhancement program on other resources including timber production. Unfortunately however, environmental guidelines and even l e g i s l a t i o n are s t i l l being introduced without any economic analysis by the responsible authorities of either the expected costs or the p a r t i c u l a r benefits to r e s u l t . Examples include the 1972 Coast G u i d e l i n e s and the equally controversial Bill-C38, introduced i n 1977 as an amendment to the Federal Fisheries Act. In the next chapter the present forest resource planning system i n the Kamloops Forest D i s t r i c t i s described. 11 CHAPTER I I I CURRENT FOREST RESOURCE PLANNING SYSTEM IN THE KAMLOOPS FOREST DISTRICT The f o r e s t c h a r a c t e r i s t i c s and the d e t a i l e d approach to f o r e s t r e s o u r c e p l a n n i n g vary between the P r o v i n c i a l F o r e s t D i s t r i c t s (B.C.F.S., 1975). Because of the author's work experience, emphasis i s on a d e s c r i p t i o n of c u r r e n t procedures i n the Kamloops F o r e s t D i s t r i c t . I t i s shown t h a t there i s s t i l l a l a c k of economic a n a l y s i s i n f o r e s t r e s o u r c e p l a n n i n g . S i t u a -t i o n s where such analyses may be most b e n e f i c i a l l y i n t r o d u c e d , g i v e n the present manpower and budget c o n s t r a i n t s , a r e d e s c r i b e d . F o r e s t r e s o u r c e p l a n n i n g c u r r e n t l y may i n v o l v e use o f the i n v e n t o r y c l a s s i f i c a t i o n process of environmental p r o t e c t i o n areas and the a p p l i c a t i o n o f t h r e e d i f f e r e n t procedures: the r e f e r r a l system; c o o r d i n a t e d r e s o u r c e p l a n s ; and the r e s o u r c e f o l i o p l a n n i n g system. Each r e f l e c t s d i f f e r e n c e s i n p u b l i c concern, r e s o u r c e use, s e n s i t i v i t y of r e s o u r c e v a l u e s and r e s o u r c e c o n f l i c t . Separate d i s c u s s i o n of each o f these procedures i n v o l v e s examination o f t h e i r terms of a p p l i c a t i o n , the r e s o u r c e agencies i n v o l v e d , g e o g r a p h i c a l importance, the type and format of i n f o r m a t i o n and, the time and c o s t i n v o l v e d (where data i s a v a i l a b l e ) . The main sources o f i n f o r m a t i o n are the Kamloops F o r e s t D i s t r i c t O f f i c e and D i s c u s s i o n Paper 6 prepared by the B.C.F.S. (B.C.F.S., 1976d). '" • -: 1. Environmental P r o t e c t i o n Areas Environmental P r o t e c t i o n Areas (E.P.As) s p e c i f y areas t h a t are not u n c o n d i t i o n a l l y a v a i l a b l e f o r timber p r o d u c t i o n because 12 of environmental, t e c h n o l o g i c a l , s o c i a l , economic and p o l i t i c a l c o n s t r a i n t s . A major aim o f i d e n t i f y i n g E.P.As i n the i n v e n t o r y process i s to a s s i s t i n t e g r a t e d l a n d management i n the i n i t i a l p l a n n i n g phase. The methodology i s not a s u b s t i t u t e f o r o p e r a t i o n a l p l a n n i n g under the r e f e r r a l or r e s o u r c e f o l i o systems;' r a t h e r i t serves to gather and present i n f o r m a t i o n on the f o r e s t r e s o u r c e . C o o p e r a t i o n of the r e l e v a n t r e s o u r c e agencies i s sought to i d e n t i f y areas o f u n s t a b l e s o i l s , where w i l d l i f e , r e c r e a t i o n and water v a l u e s are important, where timber management problems are expected and where l o g g i n g i s l i k e l y to be uneconomic. Changes i n E.P.As are allowed f o r w i t h changes i n knowledge and economic c o n d i t i o n s . These des i g n a t e d areas a s s i s t the f o r m u l a t i o n o f e n v i r o n -mental c o n s t r a i n t s i n the p l a n n i n g procedures d i s c u s s e d below. A l s o r e d u c t i o n f a c t o r s a p p l i e d to the t o t a l merchantable volume i n the E.P.As c o n t r i b u t e ; to c a l c u l a t i o n of the a l l o w a b l e c u t . 2. R e f e r r a l s The r e f e r r a l system allows i n p u t , i n the form of e n v i r o n -mental c o n s t r a i n t s from r e s o u r c e agencies, p r i o r to the a u t h o r i s a t i o n of h a r v e s t i n g permits on a l l Crown f o r e s t l a n d s , o u t s i d e resource folios. R e f e r r a l s f u n c t i o n a t the o p e r a t i o n a l l e v e l . Agencies to which development plans and c u t permits may be r e f e r r e d to i n c l u d e the F i s h and W i l d l i f e Branch of the M i n i s t r y of R e c r e a t i o n and C o n s e r v a t i o n , The F i s h e r i e s S e r v i c e of E n v i r o n -ment Canada and the Water Resources S e r v i c e o f the Department o f Environment. 13 a) The F i s h and W i l d l i f e Branch T h i s agency has prepared maps i d e n t i f y i n g c r i t i c a l w i l d l i f e , f i s h and waterfowl areas. O p e r a t i o n a l plans f o r these areas are r e f e r r e d t o F i s h and W i l d l i f e f o r t h e i r i nput b e f o r e a u t h o r i s a -t i o n f o r h a r v e s t i n g i s g i v e n . For oth e r areas a s e t of standard c o n t r a c t c l a u s e s i s a v a i l a b l e to the zone f o r e s t e r f o r i n c l u s i o n i n the h a r v e s t i n g c o n t r a c t s . Only when a p r o p o s a l departs from these c l a u s e s i s i t r e f e r r e d t o F i s h and W i l d l i f e . A r e c e n t t r i a l p e r i o d , r e p l a c i n g w r i t t e n r e f e r r a l s by v e r b a l c o n t a c t appears to have speeded the p r o c e s s i n g o f h a r v e s t i n g p e r m i t s . b) F i s h e r i e s S e r v i c e o f Environment Canada (Federal F i s h e r i e s ) An agreement e x i s t s t h a t proposed c h a r t areas, c u t t i n g p e r m i t s , timber s a l e s , and r i g h t s - o f - w a y o c c u r r i n g w i t h i n l i s t e d salmon spawning streams ( i n c l u d e s e n t i r e drainage and watershed of the stream) are r e f e r r e d to F e d e r a l F i s h e r i e s s t a f f f o r comment. For otherr-spawning streams a r e f e r r a l i s not r e q u i r e d . Instead, the a p p r o p r i a t e c l a u s e s from a s e t of c o n t r a c t c l a u s e s are i n s e r t e d i n the cut permit document by the zone f o r e s t e r . c) Water Resources S e r v i c e of the Department of Environment The procedure i s to r e f e r a l l c h a r t areas to the Water Resources S e r v i c e f o r a d e c i s i o n on whether r e f e r r a l o f the i n d i v i d u a l c u t permits i s r e q u i r e d . G u i d e l i n e s have been compiled f o r quick r e f e r e n c e and a p p l i c a t i o n . To summarise, i n an e f f o r t t o i n c r e a s e the e f f i c i e n c y of the r e f e r r a l process each major re s o u r c e agency has e s t a b l i s h e d a c l a s s i f i c a t i o n o f c r i t i c a l or high p r i o r i t y areas i n which they c o n s i d e r a d d i t i o n a l i n p u t by themselves and probably a d d i t i o n a l 14 constraints are required. For other areas, sets of guidelines have been formulated for d i r e c t application by the B.C.F.S. 3. Coordinated Resource Plans This planning procedure requires the involvement of resource users i n a series of meetings and perhaps some f i e l d t r i p s , during which problems and resource c o n f l i c t s are i d e n t i f i e d , information i s supplied and a consensus on resource constraints developed for an area. Usually a standardised format i s followed. Coordinated resource plans are developed i n areas where c a t t l e grazing values are s i g n i f i c a n t . For 1976 and 1977 a t o t a l 15 plans, covering an area of 390,700 ha had been completed i n the Kamloops Forest D i s t r i c t . Participants include the B.C. Forest Service, the Land Management Branch, the Fish and W i l d l i f e Branch, Ministry of Agriculture, Water Resources Branch, ranchers, resort owners and anyone else who may be affected. The time (and therefore the cost) to complete a plan varies from one month to one year, depending on the a b i l i t y of the d i f f e r e n t parties to come to some agreement. L i t t l e work i s involved i n preparing the f i n a l report. The report i s typed according to the standard format and maps showing location of the area and the main problem areas may be attached. Total agreement of a l l participants i s not necessary and may not be possible. As development plans are not included, r e f e r r a l procedures are s t i l l mandatory p r i o r to authorisation of timber harvesting. 15 The c o o r d i n a t e d r e s o u r c e p l a n s serve as a forum f o r d i s c u s s i o n , an o p p o r t u n i t y f o r problems to be a i r e d and f o r reso u r c e users to g a i n a b e t t e r a p p r e c i a t i o n o f mutual problems. 4 . Resource F o l i o P l a n n i n g System Resource f o l i o s comprise a c o l l a t i o n o f maps, d i s p l a y i n g p h y s i c a l and f o r e s t r e s o u r c e f e a t u r e s and environmental c o n s t r a i n t s , recommended by resource agencies t o p r o t e c t a l l f o r e s t r e s o u r c e uses. Attached to each r e s o u r c e map i s a s e t of g u i d e l i n e s , l i s t i n g both g e n e r a l and s p e c i f i c r e s t r i c t i o n s f o r timber h a r v e s t i n g o p e r a t i o n s i n the d e f i n e d area. T h i s p l a n n i n g method i s a p p l i e d a t the sub-management u n i t (watershed) l e v e l . Boundaries o f the f o l i o s u s u a l l y depend on the p l a n n i n g requirements o f a p a r t i c u l a r l i c e n s e e and a d e s i r e f o r p l a n n i n g a g e o g r a p h i c a l u n i t o f t e n r e p r e s e n t e d by a r i v e r catchment area. To December o f 1 9 7 7 a t o t a l o f e i g h t f o l i o s c o v e r i n g an area of approximately 2 , 0 7 0 k m 2 had been completed i n the Kamloops F o r e s t D i s t r i c t . A f u r t h e r 33 f o l i o s occupying 8 , 5 0 0 k m 2 were underway. T h i s compares w i t h the t o t a l area under the c o n t r o l o f the B.C.F.S. i n the Kamloops F o r e s t D i s t r i c t o f 5 , 8 7 0 , 0 0 0 ha. or 5 8 , 7 0 0 k m 2 (B.C.F.S., 1 9 7 5 ) . Agencies,groups and i n d i v i d u a l s which may be i n v o l v e d i n the pl a n n i n g process i n c l u d e the f o l l o w i n g : B.C. F o r e s t S e r v i c e — R a n g e r , D i s t r i c t O f f i c e and Head O f f i c e F i s h and W i l d l i f e Branch F i s h e r i e s S e r v i c e o f Environment Canada Parks Branch 16 Water Resources S e r v i c e Mines Department P u b l i c p a r t i c i p a t i o n L i c e n s e e Involvement of some p a r t i c i p a n t s i s l i m i t e d t o o n l y a few areas a c c o r d i n g to t h e i r i n t e r e s t s . F o r example, the Parks Branch i s onl y concerned w i t h r e c r e a t i o n a l plans o f areas a d j o i n i n g P r o v i n c i a l Parks and areas which may be s u i t a b l e f o r parks i n the f u t u r e . L a r g e l y because of a l a c k o f r e s o u r c e agency s t a f f and a shortage o f i n v e n t o r y i n f o r m a t i o n , the f o l i o system has been l i m i t e d to hig h p r i o r i t y areas. These have been i d e n t i f i e d a c c o r d i n g to p u b l i c i n t e r e s t (for example the Bonaparte mora-torium area and the S t e i n V a l l e y ) and from problem areas i d e n t i -f i e d by the v a r i o u s agencies. F o l i o maps may i n c l u d e the f o l l o w i n g : F o r e s t cover and h i s t o r y S o i l s Topography F o r e s t c a p a b i l i t y P r o t e c t i o n - hazard r a t i n g p r i o r i t y r a t i n g R e c r e a t i o n c a p a b i l i t y Range (grazing) c a p a b i l i t y * P r i v a t e l a n d * I n s e c t i n f e s t a t i o n s * F i s h and w i l d l i f e v a l u e s F e d e r a l f i s h e r i e s * - major salmon streams Water r e s o u r c e s * - water users 17 Mining p o t e n t i a l s * L i c e n s e e ' s development p l a n Those marked wi t h an a s t e r i s k are o n l y i n c l u d e d i f t h a t r e s o u r c e i s o f importance. With m e t r i c a t i o n map s c a l e are b e i n g changed from one i n c h to 40 c h a i n to 1 to 50,000. The f o l i o system i s a procedure f o r c o l l e c t i o n and presen-t a t i o n o f i n f o r m a t i o n and of communication between resource agencies. As p r a c t i c e d i n the Kamloops F o r e s t D i s t r i c t i t i n v o l v e s l i t t l e a d d i t i o n to e x i s t i n g knowledge. Again t h i s i s mainly because o f manpower and budget c o n s t r a i n t s . I t i s f e l t t h a t g r e a t e r use c o u l d be made o f company p a r t i c i p a t i o n (as on the coast) because t h e i r p e r s onnel are more f a m i l i a r w i t h l o c a l f o r e s t c o n d i t i o n s and they c o u l d help overcome the manpower d e f i c i e n c y . Of b e n e f i t to the. company would be i n c r e a s e d communication w i t h resource a g e n c i e s , p o s s i b i l i t i e s of speeding up the p l a n n i n g process and a g r e a t involvement i n f o r e s t resource p l a n n i n g . C u r r e n t l y , f o l i o s take between one and two years to complete. A c o s t a n a l y s i s of the f o l i o procedure i n d i c a t e s a c o s t of between 6 and 11 thousand d o l l a r s per f o l i o (depending on s i z e of f o l i o a r e a ) . Company estimates f o r s i m i l a r work suggest t h a t t h i s e stimate may be c o n s e r v a t i v e (Kofoed, 1977). 5. Economic Input A l l p l a n n i n g procedures o u t l i n e d ; the E.P.As, the r e f e r r a l system, the c o o r d i n a t e d resource plans and the resource f o l i o p l a n n i n g system, depend p r i m a r i l y on t e c h n i c a l and b i o l o g i c a l c r i t e r i a . For example, these c r i t e r i a are e x p l i c i t i n the 18 o b j e c t i v e s to minimise sedimentation, produce a v a r i e t y of cover and food c o n d i t i o n s f o r w i l d l i f e and to reduce harmful impacts on f i s h h a b i t a t . No attempt i s made a t r i g o r o u s economic e v a l u a t i o n o f management a l t e r n a t i v e s . Rather c o n s t r a i n t s on timber h a r v e s t i n g are s u b j e c t to i n t u i t i v e a n a l y s i s by the B.C.F.S. based on experience and common sense. For example, i n c a r i b o u h a b i t a t on steep s l o p e s ( i n excess o f 50%), and wit h low i n i t i a l merchantable volumes, recommendations by the F i s h and W i l d l i f e Branch have i n c l u d e d r e s t r i c t i o n s of a low i n t e n s i t y s e l e c t i o n h a r v e s t . From experience t h i s o p e r a t i o n i s o f q u e s t i o n a b l e economic v i a b i l i t y . L i m i t a t i o n to c a b l e l o g g i n g f u r t h e r reduces the a t t r a c t i v e n e s s o f the o p e r a t i o n . However, there i s l e s s c e r t a i n t y on the v i a b i l i t y o f h a r v e s t i n g the area when the s e l e c t i o n c o n s t r a i n t i s r e l a x e d . A l s o o f i n t e r e s t are the timber v a l u e s o f such stands c o r r e s p o n -d i n g t o changes i n technology and r e l a t i v e economic v a l u e s . I m p l i c i t i n the esta b l i s h m e n t of many g u i d e l i n e s and s p e c i f i c c o n s t r a i n t s i s a b a r g a i n i n g process between the B.C.F.S's d e s i r e to mai n t a i n timber s u p p l i e s f o r a v i a b l e f o r e s t i n d u s t r y and the o b j e c t i v e s o f re s o u r c e agencies t o mai n t a i n maximum p r o t e c t i o n f o r t h e i r r e s o u r c e v a l u e s . Questions a r i s e r e g a r d i n g the v a r i o u s g u i d e l i n e s and c o n s t r a i n t s r e s u l t i n g from t h i s b a r g a i n i n g p r o c e s s . Are they worthwhile? Should the r e s t r i c t i o n s on timber h a r v e s t i n g be i n c r e a s e d or decreased? Without economic i n p u t i n t o the p l a n n i n g process i t i s not p o s s i b l e to p r o v i d e d e f i n i t i v e answers. L i m i t a t i o n s may be s e t on b i o l o g i c a l and t e c h n i c a l grounds but no means i s a v a i l a b l e f o r s e l e c t i n g a s i t u a t i o n o f g r e a t e s t e f f i c i e n c y w i t h i n these s c i e n t i f i c bounds. 19 Some economic input i s d e f i n i t e l y possible within e x i s t i n g manpower and budget constraints. Pearse (1976, p.271) stated "Even i n the most awkward cases i t i s possible to quantify the cost (in terms of timber values foregone) of various protective or enhancement measures, and t h i s can be a considerable help i n determining the most e f f i c i e n t means of meeting prescribed objectives. More generally, i t i s v i r t u a l l y impossible to i d e n t i f y the best controls on logging p r a c t i c e s -including such diverse matters as sizes of cut-blocks, u t i l i s a -t i o n standards, and reforestation techniques--without some routine economic evaluation of the a l t e r n a t i v e s . Like some areas of forest p o l i c y , planning procedures have been conspicuous for the absence of economic analysis i n a matter of important economic decision-making." Further, such analysis would be most b e n e f i c i a l l y introduced where resource and constraint c o n f l i c t s are most serious and most apparent. Examples include the protection of the caribou habitat and of the salmon stream habitat (see Chapter VII). As experience and information increase, r e s u l t s w i l l become available for more general application. Now that the absence of economic input i n forest resourse planning has been established, i t i s appropriate to examine the economic theory of resource a l l o c a t i o n before developing an approach for incorporating economic analysis into resource planning. Concepts of economic theory are introduced and discussed i n the following two chapters. 20 CHAPTER IV ECONOMIC THEORY OF RESOURCE ALLOCATION This chapter begins by i d e n t i f y i n g the need to extend the t r a d i t i o n a l narrow viewpoint of forest resource planning from only timber extraction to include other forest uses and values. To apply economic analysis to the a l l o c a t i o n of forest resources, i t i s necessary to examine the economic theory of resource a l l o c a t i o n . The assumptions and requirements of t h i s theory are discussed with respect to the imperfect conditions exhibited by the forest sector. Comments on the inadequacy of the available resource and economic information lead • on to discussion of the a v a i l a b i l i t y and quality of cost information for timber operations and to the possible methods for applying monetary values to non-market forest uses. It i s concluded that information and procedures are available to undertake analysis of economic e f f i c i e n c y b e n e f i c i a l to forest resource planning. 1. The Multiple Values of Forests In general forests provide a heterogeneous group of values for human consumption. Timber values dominate i n B.C. because of the e x i s t i n g forest endowment, the r e l a t i v e l y small and scattered population and the dependence of the economy on the forest (timber) industry. In B.C. 94% of the forest: land i s owned by the Crown (Pearse, 1976). Government ownership i s often supported because many 21 f o r e s t v a l u e s i n c l u d i n g r e c r e a t i o n , f i s h , w i l d l i f e , s o i l and w a t e r v a l u e s a r e n o t d i r e c t l y e x p r e s s e d i n money m a r k e t t e r m s , a l t h o u g h s t i l l o f s o c i a l s i g n i f i c a n c e . A l s o , w i t h o u t c o n t r o l , d i s e c o n o m i e s o f t h e t i m b e r i n d u s t r y may harm o t h e r f o r e s t r e s o u r c e and downstream v a l u e s . T i m b e r v a l u e s s h o u l d n o t be c o n s i d e r e d i n i s o l a t i o n ; o t h e r f o r e s t r e s o u r c e v a l u e s and e x t e r n a l e f f e c t s s h o u l d a l s o be i n c l u d e d i n a n a l y s i s o f r e s o u r c e management a l t e r n a t i v e s . T h e r e i s n eed f o r a s u i t a b l e means o f r e s o u r c e a l l o c a t i o n amongst f o r e s t u s e s . 2. W e l f a r e T h e o r y The e c o n o m i c t h e o r y o f r e s o u r c e a l l o c a t i o n i s s t r o n g l y d e p e n d e n t on w e l f a r e e c o n o m i c s , a c o l l e c t i o n o f c o n c e p t s w h i c h examine t h e s o c i a l d e s i r a b i l i t y o f e c o n o m i c a l t e r n a t i v e s ( L i b b y , 1 9 7 6 ) . A b a s i c c o n c e p t o f W e l f a r e E c o n o m i c s i s .the Pareto optimum ( H e r f i n d a h l and K n eese, 1 9 7 4 ) . T h i s i s a c h i e v e d w i t h an a l l o c a -t i o n o f r e s o u r c e s and o u t p u t t h a t c a n n o t be c h a n g e d w i t h o u t someone b e i n g made w o r s e o f f (Bohm, 1 9 7 3 ) . F u r t h e r , t h e optimum depends on t h e i n i t i a l d i s t r i b u t i o n o f w e a l t h , i m p l y i n g t h a t an i n f i n i t e number o f P a r e t o o p t i m a a r e p o s s i b l e ( H e r f i n d a h l and K n e ese, 1 9 7 4 ) . The P a r e t o optimum d e f i n e s a s e t o f e c o n o m i c a l l y e f f i c i e n t a l l o c a t i o n s (Bohm, 1 9 7 3 ) . P h y s i c a l o r t e c h n i c a l e f f i c i e n c y i s u s u a l l y r e g a r d e d as t h e r e l a t i o n s h i p between t h e q u a n t i t y o f i n p u t and t h e s i z e o f t h e r e s u l t i n g o u t p u t . E c o n o m i c e f f i c i e n c y e x t e n d s t h i s i d e a , a d d i n g t h e c o n d i t i o n t h a t t h e o u t p u t o f t h e 22 goods most p r e f e r r e d by the members of the s o c i e t y are maximised a t a minimum c o s t i n l o s s o f s o c i e t y ' s a l t e r n a t i v e uses o f i t s a v a i l a b l e r e s o u r c e endowment and t e c h n o l o g i c a l knowledge ( K r u t i l l a and E c k s t e i n , 1 9 5 8 ) . I t i s u s e f u l now to c o n s i d e r some of the c o n d i t i o n s f o r a Pareto optimum and observe how s u i t a b l e t h i s " i d e a l " model i s f o r the r e a l world. Where s u i t a b l e , examples from f o r e s t r e s o u r c e s are used i n the f o l l o w i n g d i s c u s s i o n . F i r s t l y , i t i s h e l p f u l to expand the b a s i s f o r equating economic e f f i c i e n c y w i t h Pareto optimalVty. The standard proce-dure i s to apply marginal a n a l y s i s to both demand and p r o d u c t i o n theory and combine the two to d e f i n e the optimum. The r e s u l t s were s u i t a b l y expressed by Bohm ( 1 9 7 3 ) i n h i s book on s o c i a l e f f i c i e n c y : " . . . a l l m a r g i n a l r a t e s o f s u b s t i t u t i o n between r e l e v a n t p a i r s o f commodities, f a c t o r s and commodity f a c t o r s must be equal f o r a l l consumers. Moreover the m a r g i n a l r a t e s o f t r a n s f o r m a t i o n must be equal to the c o r r e s p o n d i n g marginal r a t e s o f s u b s t i t u t i o n . " T r a d i t i o n a l w e l f a r e economics f u r t h e r r e q u i r e s t h a t p e r f e c t c o m p e t i t i o n w i t h i t s c o n d i t i o n s o f many buyers and s e l l e r s ( p r i c e takers) and p e r f e c t knowledge i s a c o n d i t i o n o f Pareto o p t i m a l i t y , and t h a t producers and consumers maximise p r o f i t and u t i l i t y r e s p e c t i v e l y (Libby, 1 9 7 6 ) . A c o m p e t i t i v e e q u i l i b r i u m i s ob t a i n e d where marginal s o c i a l c o s t s are equal t o marg i n a l s o c i a l b e n e f i t s . The marg i n a l s o c i a l c o s t i s the v a l u e o f the other goods foregone by m a r g i n a l l y i n c r e a s i n g the p r o d u c t i o n and thus consumption o f one good,, 23 while the marginal s o c i a l benefit r e f l e c t s the s o c i a l preference for that good (Herfindahl and Kneese, 1974). An example of competitive equilibrium i n forest resources i s as follows. If the width of r i p a r i a n s t r i p s were marginally increased so that the additional s o c i a l benefits derived from increased f i s h and water values exceeded the added s o c i a l costs i n terms of timber values foregone, then c l e a r l y the optimum condition has not been reached. To maximise e f f i c i e n c y (achieve competitive equilibrium) the protection s t r i p s should be further increased i n width u n t i l the marginal s o c i a l benefits ( f i s h and water) are equal to the marginal s o c i a l costs (timber). It i s assumed here that only f i s h , water and timber values are affected by the width of r i p a r i a n s t r i p s . Economists sometimes dismiss problems of income d i s t r i b u t i o n e f f e cts by assuming that the marginal u t i l i t y of income i s equal for everyone (Herfindahl and Kneese, 1974). I n t u i t i v e l y t h i s does not appear valid,as even at a common income level, i ndividuals d i f f e r i n ambition and consumption desires and therefore i n marginal u t i l i t y of income. In an attempt to overcome t h i s problem the compensation p r i n c i p l e was introduced, allowing some compensation of losers by the gainers,, (Libby, 1976). This leads into the concept of benefit-cost analysis which depends largely on a relaxed Pareto type optimum, i n which net s o c i a l benefits are sought and income r e d i s t r i b u t i o n i s r e l i e d upon to compensate losers. A good summary of benefit-cost analysis and i t s short-comings i s to be found i n Mishan's book "Elements of Cost-Benefit Analysis" (1972). Further considerations of the problems of income d i s t r i b u t i o n are det a i l e d i n the next chapter. 24 3. Problems of Market Failu r e and Inadequate Knowledge Unfortunately, the foundations of the e f f i c i e n c y conditions: the money market, which acts as a common denominator of consumer's preferences and technical e f f i c i e n c y are subject to imperfection and f a i l u r e and t h i s i s p a r t i c u l a r l y noticeable with respect to forest resources. Examples of market imperfection and f a i l u r e include the prevalence of e x t e r n a l i t i e s , public good properties (Herfindahl and Kneese, 1974) and the i n a b i l i t y to measure physical values l e t alone monetary values of r e l a t i o n -ships between inputs and outputs of some uses. a) Market imperfections which cause departures from the marginal conditions necessary for Pareto optimality constitute a set of issues c a l l e d second best problems (Herfindahl and Kneese, 1974). Causes include market concentration, price support programs and taxation. D i f f i c u l t i e s of analysis are expressed by Herfindahl and Kneese (1974 , p.54): "If there i s more than one departure from Pareto optimality, or a p a r t i c u l a r type i s of such a scale that i t a f f e c t s the marginal conditions for more than one consumer and producer, p o l i c i e s inducing a p a r t i c u l a r marginal condition to be met may increase or reduce welfare i n the Pareto sense... Second best situations are d i f f i c u l t to analyse." b) E x t e r n a l i t i e s . The complex in t e r a c t i o n of resource values i n forests ensure that e x t e r n a l i t i e s are s i g n i f i c a n t i n almost any single resource use. Examples include the impact of timber h a r v e s t i n g on a e s t h e t i c s and the e f f e c t s of the salmon enhance-ment program on timber v a l u e s adjacent to streams. O f t e n v a l u e s o u t s i d e the f o r e s t are a f f e c t e d i n c l u d i n g the volume and r e l e a s e o f water f o r farming a c t i v i t i e s and the s i l t i n g and f l o o d i n g o f streams. Extending the n o t i o n o f f o r e s t r e s o u r c e p l a n n i n g from o n l y timber p r o d u c t i o n to i n c l u d e the other r e s o u r c e uses, i n t e r n a l i s e s many of these e x t e r n a l i t i e s c r e a t e d by s i n g l e use c o n s i d e r a t i o n s (now e v a l u a t i n g a l l f o r e s t r e source uses i n s t e a d o f o n l y one o r two). c) P u b l i c Goods. Some f o r e s t r e s o u r c e uses e x h i b i t p u b l i c good p r o p e r t i e s i n which the good i s a v a i l a b l e to a l l and each i n d i v i d u a l ' s consumption of such a good l e a d s to no r e d u c t i o n o f any o t h e r i n d i v i d u a l ' s consumption of t h a t good. The Pareto Optimum c o n d i t i o n r e q u i r i n g e q u a l i t y between m a r g i n a l r a t e s o f s u b s t i t u t i o n and marginal r a t e s of t r a n s f o r m a t i o n does not h o l d as another i n d i v i d u a l can consume some of the product a t a m a r g i n a l c o s t of zero ( H e r f i n d a h l and Kneese, 1974). There i s no i n c e n t i v e under a p r i v a t e exchange system to produce such a good. P u b l i c p r o v i s i o n i s necessary, s u p p l y i n g the good a c c o r d i n g t o s o c i a l d e s i r e s working through the p o l i t i c a l p r o c e s s . P u b l i c goods i n c l u d e a e s t h e t i c s , water q u a l i t y , w i l d e r n e s s awareness and, a t r e l a t i v e l y low l e v e l s of consumption, w i l d l i f e and s p o r t s f i s h i n g . (At h i g h e r l e v e l s of use, overcrowding e f f e c t s become n o t i c e a b l e i n c l u d i n g reduced c a t c h and reduced environmental q u a l i t y . ) d) Imperfect Knowledge. Market v a l u e s do not e x i s t f o r many f o r e s t r e source products making i t very d i f f i c u l t to compare 2 6 resource use s t r a t e g i e s and, t h e r e f o r e , t o f u l f i l the e f f i c i e n c y c r i t e r i o n . For these goods the p o l i t i c a l process i s f r e q u e n t l y r e l i e d upon t o d e f i n e the consumption g o a l s o f s o c i e t y (Libby, 1 9 7 6 ) . Future p r i c e s and c o s t s f o r market goods (e.g. timber) are u n c e r t a i n . In a p l a n n i n g context t h i s o mission i s p a r t i c u -l a r l y important because of the long r o t a t i o n p e r i o d s i n timber and hence the hig h c o s t o f m a i n t a i n i n g the necessary i n v e n t o r y of growing stock and the r i s k o f b i o l o g i c a l or market d i s a s t e r . The complex o f r e l a t i o n s h i p s between the v a r i o u s r e s o u r c e v a l u e s i s l a r g e l y unknown. For example, the e f f e c t s o f d i f f e r e n t systems and l e v e l s o f timber h a r v e s t i n g on the f i s h h a b i t a t i n i n d i v i d u a l streams i s not f u l l y understood (Crow, Rajagopal and Schreuder, 1 9 7 6 ) . T h i s l a c k o f p e r f e c t knowledge then r e s u l t s from i n s u f f i - : c i e n t r e s o u r c e s o f manpower and f i n a n c e t o o b t a i n f o r e s t r e s o u r c e i n f o r m a t i o n and man's i n a b i l i t y to f o r s e e f u t u r e c o n d i t i o n s . Inadequate knowledge i s o f t e n s t a t e d as the major f a c t o r s e r i o u s l y l i m i t i n g the use of the market system, f o r the a l l o c a t i o n s of f o r e s t r e s o u r c e s or to p r o v i d e environmental p r o t e c t i o n (Kimmins, 1 9 7 6 ) . Although t h i s important l i m i t a t i o n i s a p p r e c i a t e d , i t i s a l s o apparent t h a t many other procedures put forward, i n c l u d i n g g u i d e l i n e s , r e g u l a t i o n s , the p o l i t i c a l process and the m o n i t o r i n g of s o c i a l d e s i r e s a l l s u f f e r from a l a c k of knowledge. Although the type and l e v e l of data r e q u i r e d may be d i f f e r e n t among d i f f e r e n t procedures, d e c i s i o n s based on q u a n t i t a t i v e o r q u a l i t a -t i v e i n p u t are improved w i t h an i n c r e a s e i n r e l e v a n t i n f o r m a t i o n . The s e r i o u s d e f i c i e n c i e s o u t l i n e d f o r the t r a d i t i o n a l economic approach to the a l l o c a t i o n o f re s o u r c e s should not be taken as an 27 excuse to ignore the p o s s i b i l i t i e s of economic a n a l y s i s i n the d e c i s i o n p r o c e s s . 4. A v a i l a b i l i t y o f Pecuniary Values a) Timber Industry The s c a l e and importance o f the timber i n d u s t r y and the nature of i t s h a r v e s t i n g o p e r a t i o n s imply t h a t a l a r g e percen-tage o f c o n f l i c t s between resource uses are between the timber i n d u s t r y and one or more of the o t h e r resource v a l u e s . In e f f e c t , one h a l f o f the c o s t - b e n e f i t l e d g e r i s a v a i l a b l e from the timber i n d u s t r y ' s p r o d u c t i v i t y and c o s t i n f o r m a t i o n . On the o t h e r s i d e of the l e d g e r the f u l l spectrum of s i t u a t i o n s may be expected from t h a t o f w e l l documented c o s t s to t h a t o f incomplete knowledge of the p h y s i c a l i m p l i c a t i o n s o f a timber h a r v e s t i n g a c t i o n on other r e s o u r c e v a l u e s . However, even i n these extreme cases a base o f timber v a l u e s i s a v a i l a b l e f o r a n a l y s i s o f any management o p t i o n . U n f o r t u n a t e l y , even the data f o r timber o p e r a t i o n s are o f t e n u n s a t i s f a c t o r y and inadequate f o r the task of comparing h a r v e s t i n g methods and c o s t i n g the a p p l i c a t i o n of d i f f e r e n t c o n s t r a i n t s . There i s a wide v a r i a t i o n i n a c c o u n t i n g procedures among companies w i t h many, p a r t i c u l a r l y the s m a l l e r f i r m s , keeping incomplete r e c o r d s . Often procedures of aggre-g a t i n g c o s t s hide the c o s t elements r e q u i r e d f o r c o n s t r a i n t a n a l y s i s . T h i s poor data s i t u a t i o n c o u l d be r e a d i l y improved by paying more a t t e n t i o n to d e s i g n i n g a p p r o p r i a t e r e c o r d i n g systems. The problem of c o n f i d e n t i a l i t y l i m i t s i n t e r - f i r m a n a l y s i s . How-ever, i t i s expected t h a t the c o s t o f a s u i t a b l e r e c o r d system would be p a i d by the b e n e f i t s to i n d i v i d u a l f i r m s , o f improved 28 i n f o r m a t i o n f o r sound o p e r a t i o n a l p l a n n i n g and f o r evidence i n n e g o t i a t i o n s w i t h the B.C.F.S. and other a g e n c i e s / . Of f u r t h e r concern i s the l a c k of d i r e c t involvement i n timber p r o d u c t i o n by the B.C. F o r e s t S e r v i c e , the agency r e s p o n s i b l e f o r the r e s o u r c e . The r e s u l t i s t h a t with the c u r r e n t c o s t i n g methods the F o r e s t S e r v i c e c o s t f i g u r e s w i l l tend t o be second b e s t and of a very g e n e r a l nature. T h i s i s a good case f o r making data from Crown C o r p o r a t i o n s a v a i l a b l e f o r use by the F o r e s t S e r v i c e . For example, t h i s source o f i n f o r m a t i o n i s a v a i l a b l e to the New Zealand F o r e s t S e r v i c e (personal experience) and i t can con-s i d e r a b l y b e n e f i t the a p p r a i s a l system and other c o s t i n g r e q u i r e -ments . The o p p o r t u n i t y c o s t s to timber r e s u l t i n g from environmental c o n s t r a i n t s are o b t a i n e d from the timber h a r v e s t i n g c o s t s . I f r e g u l a t i o n s s p e c i f y c a b l e l o g g i n g i n s t e a d o f t r a d i t i o n a l s k i d d e r o p e r a t i o n s then the o p p o r t u n i t y c o s t to timber of the change i n h a r v e s t i n g methods i s the a d d i t i o n a l timber c o s t s i n c u r r e d . Problems may a r i s e i n examining c o n s t r a i n t s t h a t i n v o l v e l a n d a l i e n a t i o n . The o p p o r t u n i t y c o s t may be d e f i n e d as the c o s t d i f f e r e n c e between e x t r a c t i n g the wood (now a l i e n a t e d ) and the a l t e r n a t i v e source of supply. For p r a c t i c a l purposes, t h i s measure i s i m p o s s i b l e to o b t a i n i n regions of s u r p l u s timber supply, as the sequence of h a r v e s t i n g o p e r a t i o n s f o l l o w s no smooth monotonic c o s t curve. U s u a l l y i t f o l l o w s a haphazard c o s t sequence a c c o r d i n g to other p l a n n i n g c r i t e r i a (e.g. seasonal l o g g i n g , F o r e s t S e r v i c e p o l i c y ) . Where the timber i s f u l l y committed, t h i s problem does not occur as the o p p o r t u n i t y c o s t to timber of l a n d a l i e n a t i o n i s the l o s t timber production from the alienated land. The reduced timber supply i s f e l t by the. whole sustained y i e l d unit (Public Sustained Y i e l d Unit or Timber Farm Licence), the basic area used to determine the allowable annual cut. In p l a c e s i n the Vancouver Forest D i s t r i c t and the Southern Int e r i o r , the supply s i t u a t i o n i s approaching one of f u l l commitment of allowable cuts to licencees. This i s espe c i a l l y true of sawlogs. The assumption of f u l l volume commitment i s used i n the example i n Chapter VII. b) Non Market Values Much has been written on methods of placing monetary values on goods and services that do not p a r t i c i p a t e i n the market system. One method i s to use the concept of shadow prices as defined by McKean (1968): "When prices are i m p l i c i t i n exchanges that should be made to maximise a p a r t i c u l a r objective function (or to minimise a cost function), they are c a l l e d shadow pri c e s . " Often i t i s possible to impute other (non timber) resource values by working back from the timber values at stake. For example, the F i s h and W i l d l i f e Branch may consider that machine buffer s t r i p s , roading constraints and fo r e s t reserves valued at $2,000 per year i n foregone timber values are required to main-t a i n a trout stream. .From t h e i r estimates i t appears that at most 2 00 fisherman days are l i k e l y to be spent on t h i s stream i n any one year and that t h i s i s unlikely to change i n the forsee-able future. The implied value of the fishery i s therefore at 30 l e a s t $10 per man day. Experience with p r i c i n g these values elsewhere may also be used to estimate non-market values. Another method, which has found favour p a r t i c u l a r l y i n studies evaluating the demand for recreational f a c i l i t i e s , i s the willingness of the consumer to pay for an experience over the amount actually paid (consumer's surplus). Related to t h i s i s an estimation of the distance people w i l l t r a v e l to enjoy t h e i r recreational experience and the cost incurred i n the process. In the above example knowledge of fishermen's preparedness to pay for t h e i r sport and the location of the stream r e l a t i v e to t h e i r homes might be used to determine whether or not $10/day i s a reasonable pr i c e to pay for the f i s h i n g resource. These methods were used to estimate sports f i s h and w i l d l i f e values for B r i t i s h Columbia (B.C. F i s h and W i l d l i f e Branch, 1977). It i s important to be aware of the r e l a t i v e "quality" of these i n d i r e c t prices p a r t i c u l a r l y i f t h e i r derivation i s c o s t l y . The question of whether the r e s u l t s are l i k e l y to be worth the cost of t h e i r derivation i s pertinent (McKean, 1968). Unfortunately even shadow p r i c i n g techniques are not applicable to some forest uses,(Leslie, 1967). These include v i s u a l impact and s o i l and water qua l i t y . Qualitative analysis w i l l have to s u f f i c e and population location and downstream values w i l l be important considerations. c) Discrete Analysis So far only the problems of average costs have been con-sidered. The s t r i c t Pareto optimum e f f i c i e n c y r u l e and i t s less rigorous derivations (e.g. benefit-cost models) depend upon 31 marginal a n a l y s i s which i n t u r n r e q u i r e s p e r f e c t d i v i s i b i l i t y of i n p u t s and outputs. With r e f e r e n c e to f o r e s t r e s o u r c e s , v a l u e s (inputs) are o f t e n s m a l l r e l a t i v e to t o t a l use. However, economies of s c a l e r e s u l t i n very d i s c o n t i n u o u s changes of out-put i n some i n d u s t r i e s . Pulp and paper p r o d u c t i o n i s concenr: t r a t e d i n l a r g e p l a n t s . Sawmilling and r e c r e a t i o n a l concerns a l s o i n v o l v e d i s c r e t e changes which, w h i l e being small i n a p r o v i n c i a l context, can be s u b s t a n t i a l on a " l o c a l • s c a l e . Approximations to m a r g i n a l a n a l y s i s are p o s s i b l e by c a r r y i n g out d i s c r e t e i n t e r v a l a n a l y s i s (e.g. a n a l y s i s o f d i f f e r e n t widths of stream b u f f e r s t r i p s on stream and timber v a l u e s — G i l l i c k and S c o t t , 1975). In most circumstances t h i s should s u f f i c e and graphing the r e s u l t s may h e l p . In g e n e r a l , p o t e n t i a l e r r o r s i n v a l u i n g the v a r i o u s r e s o u r c e s would f a r outweigh the e r r o r s i n the approximations o f d i s c r e t e a n a l y s i s . 5. Dynamic A n a l y s i s I n c l u s i o n of time i n the a l l o c a t i o n problem i n t r o d u c e s the concept o f dynamic a n a l y s i s . The p r e v i o u s l y d i s c u s s e d s t a t i c theory i s s t i l l important as a b a s i s , and marginal a n a l y s i s i s a necessary i n g r e d i e n t i n dynamic models. E q u a l i t y o f d i s c o u n t e d marginal s o c i a l b e n e f i t s and c o s t s i s now sought from flows o f p r o d u c t i v e s e r v i c e s through time. C a p i t a l theory i s the t i t l e , g i v e n to t h i s a n a l y s i s o f an economy through time. A good d e s c r i p t i o n o f the b a s i c s of " d y n a m i c s - c a p i t a l t h e o r y , " dynamic a l l o c a t i o n models and, indeed, the p r e c e d i n g s t a t i c s concepts i s i n c l u d e d i n the "Economic Theory of N a t u r a l Resources" ( H e r f i n d a h l and Kneese, 1974). The c l a s s i c a l use of dynamic a n a l y s i s i n f o r e s t r y i s t h e w e l l know Faustman Formula f o r the d e r i v a t i o n o f the f i n a n c i a l timber r o t a t i o n (Haley, 1966). T h i s model can be expanded by i n j e c t i n g i n t o the a n a l y s i s the v a l u e s a r i s i n g from the non-timber uses of the f o r e s t . However, the inadequate understanding o f r e l a t i o n s h i p s among f o r e s t r e s o u r c e s over time suggests t h a t the p r a c t i c a l u s e f u l n e s s of such a move i s d o u b t f u l . Dynamic a n a l y s i s i n t r o d u c e s a f u r t h e r problem t h a t has r e c e i v e d much a t t e n t i o n ; t h a t of the c h o i c e o f d i s c o u n t r a t e to be used i n a n a l y s i n g p u b l i c p r o j e c t s and investment a l t e r n a t i v e s . T h i s i s not the p l a c e t o repeat the lengthy d i s c u s s i o n o f s o c i a l time p r e f e r e n c e and the s o c i a l o p p o r t u n i t y c o s t of c a p i t a l . I t should be noted, however, t h a t t h i s problem i s v e r y important i n f o r e s t r y because,with the long investment p e r i o d s / d i s c o u n t e d v a l u e s are very s e n s i t i v e to the i n t e r e s t r a t e used. A number o f authors i n c l u d i n g M a r g l i n (1963), Baumol (1968) and Manning (1977) p r e s e n t a f u l l d i s c u s s i o n on the s e l e c t i o n o f i n t e r e s t r a t e s . 6. Summary of F a c t o r s A f f e c t i n g P r a c t i c a l i t y o f E f f i c i e n c y  A n a 2 y s l s Before t u r n i n g to the q u e s t i o n o f income d i s t r i b u t i o n i n Chapter V, i t i s u s e f u l t o summarise the important p o i n t s so f a r . Examination o f the economic theory o f r e s o u r c e a l l o c a t i o n has shown some major d e f i c i e n c i e s i n i t s a p p l i c a t i o n to f o r e s t r e s o u r c e s . a) Reasons of market i m p e r f e c t i o n and f a i l u r e a re o f t e n g i v e n f o r Government involvement i n f o r e s t r e s o u r c e s . P u b l i c ownership p r o v i d e s the o p p o r t u n i t y t o i n t e r n a l i s e many of the c o s t s o f timber 33 management, r e c r e a t i o n and the o t h e r f o r e s t uses. b) Information i ) Information on timber h a r v e s t i n g c o s t s can be obtai n e d , i i ) Some d i r e c t market v a l u e s are a v a i l a b l e f o r oth e r r e s o u r c e s i n c l u d i n g commercial salmon, rangeland and p o s s i b l y water f o r a g r i c u l t u r a l purposes, i i ) Sports f i s h i n g , w i l d l i f e and r e c r e a t i o n v a l u e s are l i k e l y to be a v a i l a b l e from v a r i o u s shadow p r i c i n g techniques. Increased use and experience w i t h these methods are expected t o p r o v i d e i n c r e a s i n g l y r e a l i s t i c f i g u r e s f p r use a t l o c a l as w e l l as a t r e g i o n a l l e v e l s , i v ) Other v a l u e s i n c l u d i n g a e s t h e t i c s , water q u a l i t y , a n d s o i l q u a l i t y and s t a b i l i t y w i l l c o ntinue to depend on experienced q u a l i t a t i v e a n a l y s i s . c) D i s c r e t e A n a l y s i s i s i m p l i e d by the d i s c o n t i n u o u s nature o f many of the uses of f o r e s t r e s o u r c e s . In many s i t u a t i o n s i t may be an a c c e p t a b l e approximation to ma r g i n a l a n a l y s i s . I t i s the c o n t e n t i o n o f t h i s paper t h a t d e s p i t e these weak-nesses, the economic theory o f a l l o c a t i o n and i t s d e r i v e d techniques do have an important p a r t to p l a y i n f o r e s t r e s o u r c e p l a n n i n g . T h i s p o i n t i s r e i n f o r c e d by the suggested procedures i n Chapter VI, the example of Chapter V I I and the recommendations of Chapter V I I I . In Chapter V t h i s d i s c u s s i o n o f f o r e s t r e source a l l o c a t i o n i s extended to the o f t e n n e g l e c t e d concept o f income d i s t r i b u -t i o n . 34 CHAPTER V FOREST RESOURCE ALLOCATION AND INCOME DISTRIBUTION While economists rea d i l y assume s o c i a l objectives of maximum e f f i c i e n c y , the problems of expanding the objective function to involve other s o c i a l goals, including the c r i t e r i o n of income d i s t r i b u t i o n , are usually deferred to the p o l i t i c a l system. The mechanism for deriving these income d i s t r i b u t i o n objectives and including them i n the planning process i s not important to t h i s paper. Instead, discussion i s concentrated on the possible d i s t r i b u t i o n a l implications of forest resource planning and, i n p a r t i c u l a r , of environmental constraints for timber operations. Discussion topics include the rationale of who pays for environmental constraints, implications of stumpage as a measure of economic rent and the difference i n economic impact with variations of the geographical boundary used i n economic analysis. 1. Planning Objectives It i s agreed that a prerequisite for resource p o l i c y and planning i s a c l e a r l y defined set of objectives. The B.C.F.S. Planning D i v i s i o n (1976c, p. 6) commented as follows: "A f a i l u r e to adequately define objectives i s synonymous with a f a i l u r e to provide adequate resource management." Unfortunately no c l e a r l y defined set of objectives has been " o f f i c i a l l y " stated for the use of the Province's forest land. The economic theory of resource a l l o c a t i o n outlined i n the 3 5 previous chapter assumes an objective of maximum s o c i a l welfare defined i n terms of economic e f f i c i e n c y . A number of economists c a l l for a decision framework i n al l o c a t i o n to be expanded beyond t h i s to encompass various s o c i a l and p o l i t i c a l goals including the question of income d i s t r i b u t i o n (Libby, 1976). Some trade o f f s between e f f i c i e n c y and income d i s t r i b u t i o n are recommended (Maas, 1966). To include the c r i t e r i o n of income d i s t r i b u t i o n i n a l l o c a -t i o n analyses, a value judgement has to be made defining the preferred income d i s t r i b u t i o n . By expressing society's u t i l i t y function, the s o c i a l welfare function i s an attempt to include equity considerations within a Pareto framework (Libby, 1976). Although imperfections e x i s t i n determination of u t i l i t y weights regarding equity, i t i s s t i l l important to indicate the s i g n i f i c a n t d i s t r i b u t i o n a l implications of a project or resource a l l o c a t i o n (Mishan, 1972). 2. Who Pays the Cost of Environmenta1 Constraints? In B r i t i s h Columbia, questions with important equity im p l i -cations include the method of stumpage determination and the access to and payment for other resource uses including recreation, f i s h i n g and w i l d l i f e . For the following discussion on stumpage and equity, sub-s t a n t i a l use has been made of the Second Report of the Task Force on Crown Timber Disposal, 1974—"Timber Appraisal P o l i c i e s and Procedures for Evaluating Crown Timber i n B r i t i s h Columbia." Reference i s to the modified Rothery appraisal system practiced in the Inter i o r , where the stumpage i s a residual a f t e r sub-t r a c t i n g costs of timber harvesting and manufacture from market prices for lumber and chips. The main concerns here are with the ef f e c t s on income d i s t r i b u t i o n of a change from timber planning to f u l l forest resource planning (effects of environmental constraints), .and the a b i l i t y of stumpage to represent the true economic rent obtained from timber. As w i l l be seen below, the establishment of a minimum stumpage can have important equity implications. For stands of timber which exhibit stumpages above the minimum, an increase i n harvesting costs due to environmental constraints w i l l decrease the stumpage rate and, therefore, the revenue to the Pr o v i n c i a l Government. Everybody i s affected and not just the people who use the recreational, f i s h , w i l d l i f e and other values which are maintained and improved by the con-s t r a i n t s . The previously described estimate of the Council of Forest Industries of i n excess of $2/m3 extra harvesting cost due to constraints (estimate was made i n 1973 and i s now considered very conservative), or a minimum of $100 m i l l i o n a year (C.O.F.I., 1975), suggests an average cost to every person i n the province of over $40 per year. This price might be low for an avid wilderness user but i s probably considered high by many people i n the province. The concept of user-pays i s unl i k e l y to advance much i n the future as i t i s fraught with p o l i t i c a l and administra-t i v e d i f f i c u l t i e s (e.g. the t r a d i t i o n that the wilderness i s free for public enjoyment). Some of the services, including aesthetics and an awareness that wilderness areas exist, are true public goods and therefore do not lend themselves to a system of user payments. A further complication i s the concept of option demand, i n which individuals who do not plan to use a f a c i l i t y or service, may be w i l l i n g to pay something to insure that the item (e.g. wilderness) w i l l be available i n case they l a t e r change t h e i r minds (Lindsay, 1969). For economically marginal stands where appraisal c a l c u l a -tions indicate zero stumpage or submarginal timber, the rule of minimum stumpage applies. Currently, t h i s i s set at $0*4 per m3 i n the Int e r i o r . The e f f e c t s of further cost increases due to environmental factors can be rather complex and w i l l depend upon the s p e c i f i c s i t u a t i o n . The main ef f e c t s are q u a l i t a t i v e l y outlined here: a) The p r o f i t s o f forest companies w i l l decline thus decreasing government income tax revenues. b) Some of the increased costs may be passed onto the consumer. Environmental costs w i l l tend to push up the producer's supply curve. The more i n e l a s t i c the demand curve, the greater w i l l be the proportion of the constraint costs that i s passed onto the consumers (Kemper,1975). For the Interior t h i s e f f e c t appears to be unimportant as the lumber producers face completely e l a s t i c demand schedules (Apsey, Garton and Hajdu, 1973). c) Higher costs w i l l cause the extensive margin of timber havesting i n B.C. to shrink,resulting i n a reduced s i z e of the forest industry, everything else being equal. Again the entire population would be affected i n some way, through decreased government revenues and for some the impact could be large with l o s t jobs and reduced business. The 1978 s i t u a t i o n of poor market conditions i n the pulp and 38 paper s e c t o r , u n c e r t a i n t y i n the lumber market and o f h i g h c o s t s has tended t o d i s c o u r a g e f u r t h e r investment i n the p r o v i n c e ' s f o r e s t i n d u s t r y . Environmental c o s t s have been blamed f o r t h e i r c o n t r i b u t i o n to t h i s s i t u a t i o n (Knudsen, 1976). I t i s a p p r e c i a t e d t h a t p a r t i a l a n a l y s i s can be m i s l e a d i n g because o t h e r o p p o r t u n i -t i e s f o r investment and employment are l i k e l y to e x i s t elsewhere i n the economy. However, the r e g i o n a l i m p l i c a t i o n s of e n v i r o n -mental c o n s t r a i n t s are important f o r much of the p r o v i n c e where there are few investment a l t e r n a t i v e s to f o r e s t r y . I t i s necessary to be aware of the p o t e n t i a l impacts of f o r e s t r e s o u r c e p l a n n i n g so t h a t a l t e r n a t i v e s o l u t i o n s may be sought i f r e q u i r e d . 3. Stumpage as a Measure o f Economic Kent Economic r e n t may simply be d e f i n e d as f o l l o w s : '-"Economic r e n t i s the s u r p l u s value a t t r i b u t a b l e to the use o f any f i x e d r e s o u r c e a f t e r deducting the c o s t o f the other f a c t o r s o f p r o d u c t i o n employed." (Reed, 1975b) Stumpage, as determined i n B r i t i s h Columbia, f i t s t h i s simple d e f i n i t i o n and, t h e r e f o r e , c o u l d be c o n s i d e r e d as a measure o f economic r e n t a c c r u i n g to timber. Stumpage departs from t r u e economic r e n t because o f procedures i n the a p p r a i s a l c a l c u l a t i o n and because of the i m p l i c a t i o n s of the r e s i d u a l concept o f stumpage. Procedural d i s t o r t i o n s to stumpage as a measure of economic r e n t , i n c l u d e minimum and maximum stumpage r a t e s and allowances f o r p r o f i t and r i s k based on s a l e s r a t h e r than i n v e s t e d c a p i t a l (Reed, 1975b). Recommendations made i n the 1974 Task F o r c e Report on Crown Timber D i s p o s a l were aimed a t remedying such d e f i c i e n c i e s . 39 With reference to the residual concept of stumpage, Copithorne (1977) contended that companies are not encouraged to res i s t union claims when stumpage rates are above the minimum as they recover any increases through the stumpage c a l c u l a t i o n . Wages, therefore, capture some of the forest rent (Copithorne, 1977). Of i n t e r e s t here are the possible equity e f f e c t s of a substantial and permanent environmental cost component added into the appraisal c a l c u l a t i o n . These additional costs would increase the percentage of marginal and sub-marginal timber (marginal i s defined i n terms of minimum stumpage) for any l i k e l y market conditions and therefore encourage forest companies to be more sensitive to costs. Continuing Copithorne's argument, the economic rent presently captured by wages would tend to be dissipated by the other costs (companies are encouraged to be more re s i s t a n t to union claims). This represents a r e a l l o c a t i o n , of part of the rent from labour to the maintenance of other re-source values. The i n t e r a c t i v e impact on the economy i s l i k e l y to be complex. In simple terms, stumpages remaining above the minimum are increased. However, the e f f e c t on government revenues i s cancelled somewhat by reduced employee income tax. Below the minimum stumpage, the company benefits and the process e f f e c t i v e l y helps them pay for some of the environmental costs. 4. Geographical Aggregation and D i s t r i b u t i o n E f f e c t s This topic relates d i r e c t l y to society's valuation of regional and d i s t r i c t economic s t a b i l i t y and growth (see Byron, 1976 for a detailed analysis of forest policy on community 40 s t a b i l i t y and regional economic development) , i . e _ . . i t concerns government po l i c y i n these matters. Environmental constraints may have d i f f e r e n t impacts on the p r o v i n c i a l economy compared . to the d i s t r i c t or l o c a l economy. Additional manpower requirements s p e c i f i e d by modified harvesting systems and methods, and r e s t r i c t i o n s on ex i s t i n g operations may be favourable to the economics of the l o c a l community through higher employment and an increased p a y r o l l . At the p r o v i n c i a l l e v e l c a p i t a l e f f i c i e n c y may suffer. Comments from industry people suggest that i n i t i a l l y a l o t of the additional work requirement, e s p e c i a l l y i n roading, has been covered by e x i s t i n g plant and labour. For some roading t h i s has resulted i n poorer qu a l i t y work. Supervision has not increased noticeably although administration p a r t i c u l a r l y by government agencies probably has. Published labour and production s t a t i -s t i c s are gross averages, excluding the p o s s i b i l i t y at i s o l a t i n g t h i s possible trend from other productivity and market e f f e c t s . Further development and refinement of environmental protection i s expected to est a b l i s h a more s i g n i f i c a n t actual e f f e c t on timber productivity. By contrast the industry i s eager to suggest that environ-mental costs have helped to d i r e c t investment away from the B.C. forestry sector (Knudsen, 1976). Investment funds, diverted to other developments now promising higher returns may help to remedy p r o v i n c i a l investment e f f i c i e n c y ( i f invested i n the province). However, i t i s l i k e l y to be deleterious to regional economies, which have few options and i n B.C. are lar g e l y dependent on forest development. 41 Land a l i e n a t i o n from timber p r o d u c t i o n p r o v i d e s an interesting- case of d i s t r i b u t i o n e f f e c t s . The Parks Branch has almost f u l f i l l e d i t s o b j e c t i v e s t o form parks r e p r e s e n t a t i v e o f each of i t s d e f i n e d la n d types, p a r t i c u l a r l y i n areas approaching f u l l commitment of a l l o w a b l e cuts (Parks Branch, 1975 and B.C.F.S., 1975). However, o f f i c i a l procedures are a v a i l a b l e which a l l o w p u b l i c p r e s s u r e to r e s u l t i n the formation o f parks and w i l d e r -ness areas i n d e s i r e d l o c a t i o n s . For example, the Bonaparte Moratorium area and the P u r c e l l Wilderness Area owe t h e i r e x i s t e n c e l a r g e l y to p u b l i c p r e s s u r e , and the S t e i n V a l l e y i s c u r r e n t l y r e c e i v i n g c o n s i d e r a b l e a t t e n t i o n from environmental groups. In d i r e c t economic terms the p r o v i n c i a l economy may experience a very s l i g h t l o s s from t h i s p u b l i c p r e s s u r e w h i l e s u b s t a n t i a l l o s s e s i n jobs and income may be s u f f e r e d by l o c a l people. Often i t i s people a t a d i s t a n c e from the scene, who have the l e a s t t o l o s e , who i n s t i g a t e the p r e s e r v a t i o n move-ments . Baumol and Oates (1975) examined the d i s t r i b u t i o n a l con-sequences of i n d u s t r i a l and community p o l l u t i o n r e d u c t i o n programmes and they s t a t e d : "In sum, our models and the a v a i l a b l e evidence lend support to the view t h a t , on balance, programmes f o r environmental improvement promote the i n t e r e s t s o f higher-income groups more than those of the poor, they may w e l l i n c r e a s e the degree of i n e q u a l i t y i n the d i s t r i b u t i o n of r e a l income. Low-income f a m i l i e s are 42 more l i k e l y t o f e e l t h a t b a s i c needs, such as b e t t e r food • and housing, c o n s t i t u t e more p r e s s i n g concerns than c l e a n e r a i r and water." (Baumol and Oates, 19 7 5 ) For l a n d a l i e n a t i o n the terms r i c h and poor are r e p l a c e d by " o u t s i d e r s " and " l o c a l s " or by "m e t r o p o l i t a n r e s i d e n t s " and " r u r a l r e s i d e n t s . " I t i s not suggested t h a t " l o c a l s " are poor but t h e i r jobs are l i k e l y t o be more important t o them than to " o u t s i d e r s . " A l s o they have fewer a l t e r n a t i v e employment o p p o r t u n i t i e s (Byron, 1 9 7 6 ) . The a l l u s i o n to i n c r e a s i n g r e g i o n a l i n e q u a l i t y i s r e t a i n e d . T h i s completes the d i s c u s s i o n on the l i m i t a t i o n s i n the a p p l i c a t i o n o f economic theory t o resource a l l o c a t i o n and on some o f the concepts t h a t may be important i n examining a l t e r n a -t i v e f o r e s t r esource management p l a n s . In Chapter VI the r e s u l t s o f t h i s d i s c u s s i o n are a p p l i e d t o d e f i n e a procedure f o r u s i n g economic a n a l y s i s a t the o p e r a t i o n a l l e v e l i n f o r e s t resource management. 43 CHAPTER VI PROCEDURE FOR ECONOMIC ANALYSIS IN FOREST RESOURCE MANAGEMENT AT THE OPERATIONAL LEVEL A procedure i s developed f o r p r a c t i c a l and u s e f u l economic a n a l y s i s of management a l t e r n a t i v e s (or environmental c o n s t r a i n t s ) a t the o p e r a t i o n a l l e v e l . Before d e s c r i b i n g t h i s procedure, the importance, d i f f e r e n c e s and i n t e r r e l a t i o n s h i p of r e g i o n a l and o p e r a t i o n a l l e v e l s of p l a n n i n g are d i s c u s s e d . The reasons f o r c o n c e n t r a t i n g on the o p e r a t i o n a l l e v e l are g i v e n and the need to c o n s i d e r t r a n s a c t i o n ( a d m i n i s t r a t i o n and information) c o s t s of planned a n a l y s i s i s argued. 1. L e v e l s o f F o r e s t Resource Pl a n n i n g P a r t i c u l a r r e f e r e n c e i s made to d i s c u s s i o n papers of the B.C.F.S. P l a n n i n g D i v i s i o n (1976a, 1976b, 1976c, 1976d and 1977a). The requirement f o r d i f f e r e n t l e v e l s of p l a n n i n g depends upon the f u n c t i o n a l d i f f e r e n c e s between t h a t o f e s t a -b l i s h i n g p l a n n i n g o b j e c t i v e s and p o l i c y and t h a t of f o r e s t o p e r a t i o n s and c o l l e c t i n g i n f o r m a t i o n . a) P r o v i n c i a l and Regional L e v e l s of P l a n n i n g . Aggregated resource i n f o r m a t i o n , together w i t h demand f o r e c a s t s f o r resource uses, are used w i t h i n the bounds of s o c i a l o b j e c t i v e s to d e f i n e a p o l i c y of f o r e s t r esource a l l o c a t i o n . At these higher l e v e l s o f p l a n n i n g , f l e x i b i l i t y i s a v a i l a b l e i n p l a n n i n g d i s t r i b u t i o n of resource uses, to d e f i n e p r i o r i t y areas f o r s e n s i t i v e v a l u e s . I f r e c r e a t i o n a l v a l u e s are h i g h i n one l o c a l i t y , i t i s l i k e l y t h a t timber v a l u e s may be recovered elsewhere, where competing r e s o u r c e v a l u e s are r e l a t i v e l y low ( t h i s i s c o n s i s t e n t w i t h the c r i t e r i o n o f maximum e f f i c i e n c y ) . Some work has a l r e a d y been completed on d e v e l o p i n g c l a s s i f i c a -t i o n systems which i d e n t i f y p r i o r i t y areas f o r f o r e s t uses. The F i s h and W i l d l i f e Branch has attempted to i d e n t i f y areas of importance a c c o r d i n g to o b j e c t i v e s e s t a b l i s h e d f o r w i l d l i f e p r o d u c t i o n (B.C.F.S., 1976b). The Parks Branch has c l a s s i f i e d the Province i n t o land types, each of which i t c o n s i d e r s should be r e p r e s e n t e d by a P r o v i n c i a l park (Parks Branch, 1975). The Environment and Land use Committee (E.L.U.C.) i s de v e l o p i n g land use p l a n n i n g concepts and methods to be used a t the r e g i o n a l l e v e l . An example i s the T e r r a c e - H a z e l t o n r e g i o n a l f o r e s t r esources study (E.L.U.C, 1977). However, to date p l a n n i n g a t the r e g i o n a l l e v e l has g e n e r a l l y been l a c k i n g (Pearse, 1976). The inadequacy o f f o r e s t r e source data and the complexity and s i t e s p e c i f i c nature of f o r e s t r e s o u r c e s , d e t e r attempts a t a c c u r a t e l y a g g r e g a t i n g o p e r a t i o n a l l e v e l impacts o f res o u r c e use i n t e r a c t i o n s , to p r o v i d e a t r u e r e g i o n a l overview so necessary f o r t h i s l e v e l o f p l a n n i n g . Much can s t i l l be gained from attempts to do so as long as an awareness of p o t e n t i a l e r r o r s i s maintained. T h i s approach should i n d i c a t e gross i n e f f i c i e n c i e s i n a l l o c a t i o n (where p o t e n t i a l savings are gr e a t e s t ) and h i g h l i g h t areas o f u n c e r t a i n t y . The main problem o f inadequate i n f o r m a t i o n can o n l y be s o l v e d by c o n c e n t r a t i n g e f f o r t at the sub-management u n i t and o p e r a t i o n a l l e v e l s o f p l a n n i n g . b) Sub-management U n i t and Operation L e v e l s o f Pla n n i n g . In t h i s paper emphasis i s d i r e c t e d towards t h i s l e v e l o f p l a n n i n g because o f a l a c k of w e l l d e f i n e d o b j e c t i v e s f o r f o r e s t r e source p o l i c y i n the P r o v i n c e , and the need f o r good q u a l i t y i n f o r m a t i o n on the r e l a t i o n s h i p s between f o r e s t v a l u e s i n d i f f e r e n t c o n d i t i o n s . A l s o the more complex problems, i n t r o d u c e d when h a n d l i n g s e v e r a l l e v e l s o f p l a n n i n g ^ a r e avoided. I t i s important to show f o r e s t managers t h a t good a n a l y s i s i s p o s s i b l e . The obvious s t a r t i n g p o i n t i s a t the o p e r a t i o n a l l e v e l , the concern of -.most of the P r o v i n c e ' s f o r e s t r y p e r s o n n e l . Economic as w e l l as t e c h n i c a l and b i o l o g i c a l i n f o r m a t i o n from the o p e r a t i o n a l l e v e l i s important f o r a l l o w i n g l o c a l a d a p t a t i o n o f environmental g u i d e l i n e s and as feedback i n t o h igher l e v e l s of p l a n n i n g . 2. A d m i n i s t r a t i o n and Information Costs These c o s t s are important c o n s i d e r a t i o n s i n the a n a l y s i s o f f o r e s t r e source a l l o c a t i o n , p a r t i c u l a r l y i n the p r e s e n t s i t u a t i o n where most of the resource agencies are u n d e r s t a f f e d and l a c k the f i n a n c i a l backing to f u l f i l . t h e r e s p o n s i b i l i t i e s i m p l i e d by the concept of f o r e s t r e s o u r c e p l a n n i n g . D i s c u s s i o n i n c l u d e s comments on the c o s t s of b a s i c data, c o l l a t i o n of i n f o r m a t i o n and the use of data, the p o t e n t i a l of e l e c t r o n i c data p r o c e s s i n g and the importance of the human v a r i a b l e . To i n c r e a s e e f f i c i e n c y i n the c o l l e c t i o n of b a s i c f o r e s t d ata, Pearse (1976) recommended improved d e s i g n o f data c o l l e c -t i o n systems to take advantage of present procedures (e.g. c o l l e c t i n f o r m a t i o n on w i l d l i f e p o p u l a t i o n s and h a b i t a t c o n c u r r e n t l y with timber inventory) and the c o n c e n t r a t i o n of p l a n n i n g a c t i v i t i e s on p r i o r i t y areas. For some r e s o u r c e s , i n c l u d i n g salmon, i n f o r m a t i o n on s i t e s p e c i f i c environmental i n t e r a c t i o n s i s l i m i t e d and very c o s t l y to o b t a i n . In a P r o v i n c i a l c ontext e x t e n s i v e r e s e a r c h dependent mainly on t r a i n e d o b s e r v a t i o n and improved data c o l l e c t i o n * m a y be a worthwhile supplement to the few i n t e n s i v e s t u d i e s . The r e s o u r c e f o l i o p l a n n i n g system, as implemented i n the Kamloops F o r e s t D i s t r i c t , i s a procedure f o r c o l l a t i o n of e x i s t i n g data and e s t a b l i s h m e n t of environmental g u i d e l i n e s . I t i s p o s s i b l e to c o s t the procedure (Chapter I I I ) . As w i t h the other c a t e g o r i e s of c o s t , value judgements on whether the p l a n n i n g e f f o r t i s worthwhile, may be d i f f i c u l t because of a l a c k o f understanding o f the b e n e f i t s . The involvement of a number of agencies i n f o r e s t resource p l a n n i n g r e q u i r e s p o s i t i v e c o o p e r a t i o n to a v o i d i n e f f i c i e n t management. For example, the p r o v i s i o n o f f o r e s t r e c r e a t i o n a l f a c i l i t i e s by both the B.C.F.S. and the Parks Branch, without j o i n t p l a n n i n g has been c r i t i c i s e d (Crook, 1 9 7 5 ) . Changes i n the p r e s e n t r e s o u r c e a d m i n i s t r a t i o n to overcome some of these i n e f f i c i e n c i e s were recommended by Pearse ( 1 9 7 6 ) . Great p o t e n t i a l e x i s t s f o r the use of e l e c t r o n i c data p r o c e s s i n g . Advantages i n the h a n d l i n g of simple and r e p e t i t i v e c a l c u l a t i o n s and i n s i m u l a t i o n of combinations of assumptions are r e a d i l y apparent. E f f e c t s on a l l o w a b l e c u t and timber h a r v e s t i n g c o s t s may be i n c o r p o r a t e d i n t o a l l o c a t i o n m o d e l s — a s f o r example the Computer A s s i s t e d Resource P l a n n i n g System (C.A.R.P.) under development by the B.C.F.S. The s i t e s p e c i f i c nature of most f o r e s t r e s o u r c e i n t e r -47 a c t i o n s causes problems i n m o d e l l i n g . The Snohomish V a l l e y Environmental Network (SVEN) r e s e a r c h program i n Washington State d i d not attempt to c o n s t r u c t a g e n e r a l model f o r the i n t e r a c t i o n o f l o g g i n g a c t i v i t y on salmon p r o d u c t i o n (Crow e t a l , 1976). Instead, they developed a data r e f e r e n c e system based on an e x t e n s i v e l i t e r a t u r e review and f i e l d o b s e r v a t i o n s . The f i s h and w i l d l i f e impact module planned as p a r t of the CARP program (B.C.F.S., 1977b) i s not y e t a v a i l a b l e ( e a r l y 1978). Man, as an o p e r a t i o n v a r i a b l e , should not be f o r g o t t e n i n f o r e s t resource p l a n n i n g . The p o t e n t i a l environmental advan-tages of a w e l l designed h a r v e s t i n g l a y o u t may be l o s t by a poor operator or poor s u p e r v i s i o n . The importance o f road and b l o c k l a y o u t has o f t e n been s t r e s s e d ( C o t t e l l e_t a l , 1976) both f o r e f f i c i e n c y i n h a r v e s t i n g and f o r environmental p r o t e c t i o n . Perhaps more a t t e n t i o n should be given to t r a i n i n g l o g g i n g engineers and machine o p e r a t o r s t o understand the requirements of the "other" f o r e s t r e s o u r c e s , to interpret p h y s i c a l c o n d i t i o n s and to p l a n a c c o r -d i n g l y . Some work has a l r e a d y been done. K e i t h Moore o f the B.C.F.S. has developed a decision-making framework f o r stream-bank management under E.P.763. I t w i l l soon come out as a handbook f o r use by f i e l d personnel (B.C.F.S., 1976g, p.55). In another example a handbook o u t l i n i n g methods f o r reducing the environmental impact of ground s k i d d i n g i n the Nelson F o r e s t D i s t r i c t has been w r i t t e n (Johnson and Wellburn, 1976). P r a c t i c a l savings are p o t e n t i a l l y l a r g e i n improved communication w i t h i n agencies and companies and between them. 48 A f t e r a l l i t i s the machine operator who b u i l d s the road and not the f o r e s t manager. 3. Model f o r I n t r o d u c i n g Economic A n a l y s i s i n t o F o r e s t  Resource P l a n n i n g . T h i s procedure i s concerned w i t h a n a l y s i s a t the o p e r a t i o n a l l e v e l . Resource use o b j e c t i v e s and methods of aggregat i n g o p e r a t i o n a l i n f o r m a t i o n are necessary f o r higher l e v e l s o f p l a n n i n g . In summary the procedure i s as f o l l o w s : a) I d e n t i f y the environmental c o n s t r a i n t s on timber h a r v e s t i n g and management o p e r a t i o n s . b) I d e n t i f y the normal or base o p e r a t i o n s i t u a t i o n . c) Compare a) and b) and use p r e v i o u s experience to i d e n t i f y c o n s t r a i n t s which are l i k e l y to be " s i g n i f i c a n t " c o s t s t o timber v a l u e s . d) Develop a range of management a l t e r n a t i v e s f o r comparative a n a l y s i s . e) I d e n t i f y timber c o s t elements t h a t vary " s i g n i f i c a n t l y " between management a l t e r n a t i v e s . f) D e r i v e comparative o p p o r t u n i t y c o s t s f o r timber v a l u e s foregone. g) I d e n t i f y and attempt t o value o t h e r f o r e s t r e source uses f o r management a l t e r n a t i v e s . h) Determine the management p r e s c r i p t i o n which maximises the economic e f f i c i e n c y o f resource a l l o c a t i o n from the value s o b t a i n e d i n f) and g ) . i ) Examine p o s s i b l e s o c i a l impacts ( i n p a r t i c u l a r the e f f e c t s on income d i s t r i b u t i o n ) o f the management o p t i o n s . 49 j) Make recommendations based on h) and i ) . These stages i n the a n a l y s i s w i l l now be d i s c u s s e d i n more d e t a i l . a) I d e n t i f y environmental c o n s t r a i n t s : G u i d e l i n e s , i n c l u d i n g both g e n e r a l and s p e c i f i c c o n s t r a i n t s from r e f e r r a l s , f o l i o s and other p l a n n i n g mechanisms are u s e f u l here. b) I d e n t i f y the normal o p e r a t i o n s i t u a t i o n : T h i s i s o f t e n assumed to be t h a t without the c o n s t r a i n t s and i t i s used as a base or c o n t r o l i n the c o s t i n g e x e r c i s e . The base may be d e f i n e d f o r the whole o p e r a t i o n or s e p a r a t e l y f o r each c o s t element as the e x e r c i s e proceeds (see Chapter V I I ) . c) " S i g n i f i c a n t " c o n s t r a i n t s : Many of the c o n s t r a i n t s demanded by other f o r e s t uses w i l l , i n d i v i d u a l l y and i n t o t a l , have o n l y a minor impact on the c o s t s of timber o p e r a t i o n s . U s u a l l y from p r e v i o u s experience, i t w i l l be p o s s i b l e to i d e n t i f y the one or more " c r i t i c a l " c o n s t r a i n t s b e f o r e b eginning the a n a l y s i s and t h e r e f o r e c o n c e n t r a t e on these. The words " s i g n i f i c a n t " and " c r i t i c a l " as used here imply some coarse q u a n t i t a t i v e judgement by the a n a l y s t . For example minor (not s i g n i f i c a n t ) c o n s t r a i n t s may i n c l u d e the g r a s s i n g of s k i d t r a c k s and l a n d i n g s , the r e p a i r of fences and the c o n s t r u c t i o n of c a t t l e s t o p s . In most circumstances these c o s t s are l i k e l y t o be l e s s than $0»04/m 3 of harvested timber. By c o n t r a s t , " c r i t i c a l " c o n s t r a i n t s may be removal of l a n d and i t s wood volume from timber p r o d u c t i o n (reducing timber supply) or i t may be a l i m i t a t i o n on b l o c k s i z e combined with a low l o g g i n g i n t e n s i t y ( e f f e c t i v e l y i n c r e a s e s r o a d i n g c o s t s ) . Both a l a r g e r e d u c t i o n i n timber supply and f i r s t pass r o a d i n g c o s t s 50 i n c r e a s e d by $1 per m3 are " s i g n i f i c a n t " c o s t s . d) Develop management a l t e r n a t i v e s f o r comparative a n a l y s i s : T h i s i s necessary to overcome problems caused by inadequate knowledge of f o r e s t environment i n t e r a c t i o n s and the d i s c r e t e p r o d u c t i o n f u n c t i o n s c h a r a c t e r i s t i c of the f o r e s t r e s o u r c e and i t s user i n d u s t r i e s . An example of the former i s the c u r r e n t i n a b i l i t y t o p r e d i c t c r i t i c a l l e v e l s of timber h a r v e s t i n g a c t i v i t y f o r a g i v e n catchment i n terms of d e t r i m e n t a l impact on downstream salmon v a l u e s . With present knowledge a v a r i e t y of h a r v e s t i n g p r e s c r i p t i o n s may be a c c e p t a b l e . For example, be f o r e h a r v e s t i n g , i t may be i m p o s s i b l e to d i s c e r n a d i f f e r e n c e i n impact on salmon v a l u e s , between a p r o g r e s s i v e s e l e c t i o n o p e r a t i o n and a two-pass, small c l e a r - c u t block o p e r a t i o n , c l o s e t o the salmon spawning r i v e r . Of i n t e r e s t then i s which a l t e r n a t i v e y i e l d s the lowest l o g g i n g c o s t . S i m i l a r l y there may be no evidence f o r d i f f e r e n t i a l impact on salmon v a l u e s over a range of c l e a r - c u t b l o c k s i z e s or over a range o f l o g g i n g i n t e n s i t i e s (% timber removed i n f i r s t p a s s ) . F u r t h e r the t i m i n g o f the h a r v e s t i n g a c t i v i t y may be important i n terms o f i n t e r e s t charges c a r r i e d by the timber o p e r a t i o n and the impact on v a l u e s o b t a i n e d from the c y c l i c a l salmon p o p u l a t i o n s ( t h i s i s demonstrated i n Chapter V I I ) . Economic procedures are l a r g e l y dependent on marginal a n a l y s i s , which i s s u b j e c t to the assumption of p e r f e c t d i v i -s i b i l i t y . An approximation t o marginal a n a l y s i s can be o b t a i n e d by e v a l u a t i n g a range of p r a c t i c a l l e v e l s of the c o n s t r a i n t s . Any c r i t i c a l c o n s t r a i n t l e v e l (shown by 51 v a r i a t i o n i n r a t e s of change) i n terms of c o s t s or of some p h y s i c a l measure of environmental impact i s l i k e l y t o be of i n t e r e s t to the a n a l y s t . For some environmental i n t e r a c t i o n s i n s u f f i c i e n t f i e l d i n f o r m a t i o n and understanding o f the mechanisms i n v o l v e d make i t d i f f i c u l t t o e v a l u a t e v a l u e d i f f e r e n c e s over the range of c o n s t r a i n t l e v e l s examined. Some r e s e a r c h e r s have a p p l i e d s u b j e c t i v e p r o b a b i l i t i e s i n an attempt to overcome t h i s problem, i n the e v a l u a t i o n of the width of r i p a r i a n s t r i p s on f i s h v a l u e s (Sadler, 1970; G i l l i c k and S c o t t , 1975). e) I d e n t i f y " s i g n i f i c a n t " timber c o s t elements: These depend on the c r i t i c a l c o n s t r a i n t s i d e n t i f i e d i n c) and on experience. Some examples i n c l u d e : A l i e n a t i o n of timber from h a r v e s t i n g - - e f f e c t s the a l l o w a b l e c u t . Roading and to a l e s s e r extent h a u l i n g c o s t s w i l l be a f f e c t e d depending on the l o c a t i o n and s i z e of the r e s e r v e . S e l e c t i o n l o g g i n g — h a r v e s t i n g , r o a d i n g and h a u l i n g c o s t s . Small block s i z e — r o a d i n g , h a u l i n g and h a r v e s t i n g c o s t s . D i r e c t i o n a l f a l l i n g - f a l l i n g c o s t s . Logging i n t e n s i t y and pass s y s t e m — r o a d i n g and h a u l i n g c o s t s . f) Opportunity c o s t s f o r timber val u e s foregone: The main sources o f timber c o s t s a r e : i ) Company c o s t s . Accounting procedures o f t e n vary between companies making comparisons d i f f i c u l t . i i ) F o r e s t S e r v i c e a p p r a i s a l c o s t s . These s u f f e r from t h e i r g e n e r a l i t y (not s i t e s p e c i f i c ) and t h e i r i n d i r e c t source. (The B.C.F.S. does not run i t s own h a r v e s t i n g o p e r a t i o n s although i t does c a r r y out some p r o d u c t i o n s t u d i e s ) . i i i ) Other s t u d i e s . Costs are l i k e l y t o be s p e c i f i c to c e r t a i n c o n d i t i o n s and assumptions. To compare management a l t e r n a t i v e s which have d i f f e r e n t investment and r e t u r n s time p r o f i l e s , the expected net v a l u e s f o r each year are d i s c o u n t e d to the prese n t (present v a l u e ) . The c o n t r o v e r s y on the s e l e c t i o n of an a p p r o p r i a t e d i s c o u n t r a t e has not y e t been decided. There appears t o be m e r i t i n Teeguarden's ( 1 9 7 6 ) s u g g e s t i o n o f two r a t e s o f i n t e r e s t . One, "a r e l a t i v e l y low r a t e f o r s t r a t e g i c , long range investment p l a n n i n g f o r developing p r o d u c t i v e c a p a c i t y " (Teeguarden, 1 9 7 6 ) , i s supported by the r e c e n t comments of Smith ( 1 9 7 6 ) and Manning ( 1 9 7 7 ) . I t appears t h a t a r a t e c l o s e to f i v e per cent i s advocated f o r t h i s r o l e (Teeguarden, 1 9 7 6 ) . "The second higher one f o r p l a n n i n g d e p l e t i o n o f the s u r p l u s old-growth stock. . . .- The j u s t i f i c a t i o n f o r a h i g h r a t e i s the urgent need t o convert r a p i d l y , subproductive s u r p l u s growing stock to c a p i t a l which can be r e i n v e s t e d to meet the demands f o r p u b l i c s e r v i c e s w i t h h i g h s o c i a l time p r e f e r e n c e i n the areas of educat i o n , t r a n s p o r t a t i o n , h e a l t h , w e l f a r e and so on." (Teeguarden, 1 9 7 6 ) . For t h i s purpose a d i s c o u n t r a t e c l o s e to the t en per cent advocated f o r the U n i t e d S t a t e s i s i m p l i e d ( M c K i l l o p , 1 9 7 6 ) . Knowledge of c u r r e n t c o s t s and p r i c e s i s i m p e r f e c t and the f u t u r e i s unknown. A l s o present v a l u e s are v e r y s e n s i t i v e to d i s c o u n t r a t e s , p a r t i c u l a r l y over the long p e r i o d s common to investments i n f o r e s t r y . S e n s i t i v i t y a n a l y s i s i s necessary t o i n d i c a t e those f a c t o r s to which the a n a l y s i s i s most s e n s i t i v e and to show what range of valu e s are " l i k e l y " . To h i g h l i g h t the most s e n s i t i v e v a r i a b l e s i t may be u s e f u l t o graph the r e s u l t s o f the s e n s i t i v i t y a n a l y s i s w i t h percentage or u n i t v a r i a t i o n of the v a r i a b l e s on the x - a x i s and the cor r e s p o n d i n g v a r i a t i o n i n the present v a l u e on the y - a x i s (Riggs, 1977). I n c l u s i o n of maximum, minimum and expected v a l u e s f o r the v a r i a b l e s ( i f t h i s i n f o r m a t i o n i s a v a i l a b l e ) would be very u s e f u l to the planner. g) I d e n t i f y and ev a l u a t e other r e s o u r c e uses: The main "other" resource uses may be i d e n t i f i e d from the c o n s t r a i n t s i n a ) . The r e l e v a n t p u b l i c agencies (e.g. F i s h and W i l d l i f e Branch and F e d e r a l F i s h e r i e s ) should be c o n s u l t e d f o r i n f o r m a t i o n necessary to va l u e the d i f f e r e n t r e s o u r c e s . As with timber, the procedure i s to attempt to p l a c e a d o l l a r value on the f o r e s t uses and to express them i n pr e s e n t v a l u e terms (discounted to the p r e s e n t ) . For some uses, p h y s i c a l and market i n f o r m a t i o n may be a v a i l a b l e f o r use i n the a n a l y s i s . Examples i n c l u d e the commercial v a l u e o f salmon f i s h e r i e s (see Chapter VII) and the value of forage to the c a t t l e i n d u s t r y . For other resource uses i t may be p o s s i b l e to apply shadow p r i c i n g techniques. A s e r i e s of r e p o r t s has been p u b l i s h e d by the B.C. F i s h and W i l d l i f e Branch, p r o v i d i n g methodology and some ge n e r a l v a l u e s f o r f i s h and w i l d l i f e r e c r e a t i o n a l v a l u e s i n B.C. (B.C. F i s h and W i l d l i f e Branch, 1977). The F e d e r a l F i s h -e r i e s Department has computed r e c r e a t i o n a l v a l u e s f o r salmon. An estimate was made of the val u e of b i g game hunting i n A l b e r t a ( P a t t i s o n and P h i l l i p s , 1971). Numerous estimates of f i s h and w i l d l i f e r e c r e a t i o n a l v a l u e s have been made i n the U n i t e d 54 S t a t e s . A summary of some of the r e s u l t s f o r salmon and st e e l h e a d s p o r t f i s h e r s i s p r o v i d e d by G i l l i c k and S c o t t (1975). Data on f i s h or mammal p o p u l a t i o n s i z e , and use o f the resource by people are important. U n f o r t u n a t e l y t h e r e a re many areas i n B.C. f o r which only crude estimates are a v a i l a b l e . Some resource uses w i l l have t o be q u a l i t a t i v e l y examined. These i n c l u d e v i s u a l appearance and knowledge o f untouched w i l d e r n e s s areas. The former i s l i k e l y to be most important near p o p u l a t i o n c e n t r e s and communication c o r r i d o r s , w h i l e the l a t t e r i s served by parks and w i l d e r n e s s areas and i s not always l o c a t i o n dependent. h) Maximum e f f i c i e n c y : Values o b t a i n e d i n f ) and g) are summed to determine the "most e f f i c i e n t " management a l t e r n a t i v e or i n othe r words the p r e s c r i p t i o n which g i v e s the g r e a t e s t combined net b e n e f i t from a l l v a l u e d r e s o u r c e s . I f the q u a l i f i e d c ontent of the a n a l y s i s i s s u b s t a n t i a l the v a l i d i t y of the e f f i c i e n c y r e s u l t s i s d i m i n i s h e d . However, c o n s t r a i n t v a r i a b l e s important to the r e s u l t s and areas of g r e a t e s t data d e f i c i e n c y are i d e n t i f i e d . A l s o the r e l a t i v e importance o f the d i f f e r e n t r e s ource v a l u e s w i l l o f t e n become apparent. i ) S o c i a l impacts: As s t a t e d i n Chapter V i t i s important to expand the d e c i s i o n framework f o r f o r e s t r e s o u r c e use beyond the s i n g l e c r i t e r i o n o f e f f i c i e n c y . Employment, government revenues and va l u e added a r e c o n s i d e r e d here as examples of c r i t e r i a which may be used. A l l t h r e e are p a r t i c u l a r l y a p p l i c a b l e t o changes i n the a l l o w a b l e c u t (timber s u p p l y ) . Only a b r i e f review of the concepts i s i n c l u d e d . For f u r t h e r d i s c u s s i o n and f o r e s t i m a t i o n of i n d i c e s f o r employment, 55 government revenues and v a l u e added e f f e c t s r e s u l t i n g from changes i n timber supply, see appendices I, II and I I I . Changes i n employment are most r e l e v a n t to the l o c a l or d i s t r i c t scene. I t i s an i n d i c a t i o n o f the s o c i a l impact o f environmental p r o t e c t i o n a t these l e v e l s . Employment changes are o n l y l i k e l y to be of concern to the P r o v i n c i a l economy i n l a r g e new developments or when the impacts of timber o p e r a t i o n ( s ) c o n s t r a i n t s are aggregated over a r e g i o n or the P r o v i n c e . The measurement of government revenues has g e n e r a l income d i s t r i b u t i o n i m p l i c a t i o n s . I t i n c l u d e s two main c a t e g o r i e s ; stumpage and t a x a t i o n . Stumpage was d i s c u s s e d i n Chapter V. Both stumpage and c o r p o r a t e income taxes are s t r o n g l y dependent on market c o n d i t i o n s . Changes i n employee income tax r e s u l t i n g from l o c a l environmental p r o t e c t i o n may not be v a l i d because of m o b i l i t y of labour and b u s i n e s s i n the economy. U s u a l l y one has t o contend w i t h an estimate of p o t e n t i a l l o s s e s , and q u a l i t a t i v e comments on the m o b i l i t y of f a c t o r s , as s p e c i f i c r e s e a r c h i s o f t e n r e q u i r e d to c ontinue the a n a l y s i s . The v a l u e added of the p r o c e s s i n g i n d u s t r i e s i s a measure of the p o t e n t i a l l i n k a g e e f f e c t s and the economic a c t i v i t y generated by the raw m a t e r i a l . Value added was d e f i n e d by Reed (1973) as: "the s e l l i n g v alue of shipments, minus the c o s t o f manufacturing m a t e r i a l s and s u p p l i e s , minus the c o s t o f f u e l and e l e c t r i c i t y consumed, p l u s or minus i n v e n t o r y adjustment." 56 Reed (1973) continued that, while value added e l i m i n a t e s double c o u n t i n g , i t ignores important elements of c o s t which must be recovered from s a l e s revenue. Because o f t h i s a c o n s i d e r a b l e v a r i a t i o n i n approaches to measuring the s i z e and economic importance of i n d u s t r i e s i s taken by d i f f e r e n t o r g a n i s a t i o n s . For example the F e d e r a l F i s h e r i e s S e r v i c e measures the value of a salmon run i n processed value terms. Care should be taken to ensure t h a t f i g u r e s of e q u i v a l e n t d e f i n i t i o n are being compared. j) Recommendations f o r r e s o u r c e management are made from the r e s u l t s of a n a l y s i s of economic e f f i c i e n c y (h) and s o c i a l impacts ( i ) . The weight given to each w i l l depend on o b j e c -t i v e s f o r f o r e s t resource a l l o c a t i o n . Although d e f i n i t i v e answers w i l l r a r e l y be a v a i l a b l e , the e f f e c t s of v a r i a t i o n o f the main c o n s t r a i n t s should be d i s c e r n a b l e and w i l l be important i n f o r m a t i o n f o r the decision-maker. In the next chapter, the procedure developed here is' a p p l i e d to a f o r e s t r e source c o n f l i c t as a p r a c t i c a l i l l u s t r a -t i o n of the p o t e n t i a l p o s s i b i l i t i e s and problems of the suggested a n a l y s i s . CHAPTER VII EXAMPLE OF ECONOMIC ANALYSIS OF ENVIRONMENTAL CONSTRAINTS: THE SEYMOUR RIVER RESOURCE FOLIO 1. I n t r o d u c t i o n An important p a r t of t h i s type of study i s examples of the a p p l i c a t i o n o f recommended procedures to r e a l l i f e problems. For t h i s paper, the procedure e s t a b l i s h e d i n the p r e v i o u s chapter i s demonstrated by examining timber c o n s t r a i n t s i n the Seymour R i v e r Resource F o l i o i n the Kamloops F o r e s t D i s t r i c t . The study area i s c e n t r e d on the upper Seymour R i v e r which f a r t h e r south flows i n t o the Seymour Arm of Shuswap Lake. Maps showing the area's l o c a t i o n and the main c o n s t r a i n t s can be found i n Appendix VI. Major resource v a l u e s i n apparent c o n f l i c t i n c l u d e timber, moose (Alces a l c e s andersoni Peterson) along the Seymour R i v e r and, l o c a t e d i n the lower Seymour R i v e r (south of the re s o u r c e f o l i o ) , one of the more important spawning grounds f o r sockeye salmon (Oncorhynchus nerka) i n the F r a s e r R i v e r system. I n i t i a l i n t e r e s t i n the area was aroused by one of the o r i g i n a l c o n s t r a i n t s which s p e c i f i e d a 400 m wide timber r e s e r v e along the Seymour R i v e r . S u b s t a n t i a l timber v a l u e s were i n v o l v e d as the estimated 6 00 ha e f f e c t i v e l y i n c l u d e s a hig h p r o p o r t i o n of the b e t t e r s i t e s i n the f o l i o area. A l s o the r e s e r v e i s s i t u a t e d along the main access i n t o the f o l i o area and i t s topography i s f a v o u r a b l e to l o g g i n g . A high c o s t i n foregone timber v a l u e s was apparent without any obvious r e t u r n i n salmon b e n e f i t s . 58 The c o n s t r a i n t has s i n c e changed due to the in t e r - a g e n c y " b a r g a i n i n g p r o c e s s " d e s c r i b e d i n Chapter I I I . The example has been r e t a i n e d , a s the type of re s o u r c e c o n f l i c t (salmon, w i l d l i f e — t i m b e r ) and the c o n s t r a i n t s and c o s t f a c t o r s are common i n the southern I n t e r i o r of B.C. The contents and i n some cases the d e t a i l , p r esented i n t h i s example are g r e a t e r than t h a t envisaged i n a common use s i t u a t i o n . Here i t i s necessary to determine c r i t e r i a and c o s t f a c t o r s t h a t may have wide a p p l i c a t i o n (e.g. employment e f f e c t s and salmon v a l u e s ) , to study r e l a t i o n s h i p s t h a t are u n f a m i l i a r to the author (e.g. l o g g i n g impact on stream h a b i t a t ) and d i s c u s s v a r i o u s c o s t concepts. I f the procedure was f r e q u e n t l y used, data f i l e s would become e s t a b l i s h e d and pr e v i o u s s t u d i e s would be a v a i l a b l e f o r comparison and r e f e r r a l . Before commencing a n a l y s i s , the s i g n i f i c a n t environmental c o n s t r a i n t s are d e f i n e d . From these, timber h a r v e s t i n g a l t e r n a t i v e s are determined and a b a s i c h a r v e s t i n g schedule c o n s t r u c t e d . The impacts o f the c o n s t r a i n t s on timber v a l u e s a re examined f i r s t . Important c o s t elements i n c l u d e those of al l o w a b l e c ut e f f e c t s , s e l e c t i o n l o g g i n g and ro a d i n g . Costs of h a u l i n g and d i r e c t i o n a l f a l l i n g are a l s o e s timated and adverse s k i d d i n g i s commented on. The moose res o u r c e i s i m p l i c i t l y v alued from the summary of foregone timber v a l u e s . Logging impacts on stream h a b i t a t and the importance o f environmental f a c t o r s d u r i n g the salmon i n c u b a t i o n p e r i o d are reviewed and r e l a t e d where p o s s i b l e to the Seymour R i v e r . Salmon v a l u e s are then estimated c o r r e s p o n d i n g to the d i f f e r e n t h a r v e s t i n g a l t e r n a t i v e s . F i n a l l y , the r e s u l t s are d i s c u s s e d and a h a r v e s t i n g s t r a t e g y w i t h environmental r e s t r i c t i o n s i s recommended f o r the c o n s t r a i n t area. 2. Environmental C o n s t r a i n t s a) F e d e r a l F i s h e r i e s i ) O r i g i n a l l y F e d e r a l F i s h e r i e s s t i p u l a t e d a l o g g i n g f r e e r e s e r v e , 200 m wide, e i t h e r s i d e of the Seymour R i v e r ( t o t a l 400 m wide). For purposes of comparison t h i s c o n s t r a i n t i s r e t a i n e d i n the a n a l y s i s . i i ) A f t e r d i s c u s s i o n between the F o r e s t S e r v i c e and the F e d e r a l F i s h e r i e s S e r v i c e , the r e s e r v e was changed to a b u f f e r zone i n September of 1977, w i t h the f o l l o w i n g timber h a r v e s t i n g r e s t r i c t i o n s p e r t a i n i n g to i t : 1) no l a n d i n g s w i t h i n the 400 m wide s t r i p ; 2) a 40 m machine b u f f e r s t r i p along the Seymour Rive r ; 3) o n l y w i n t e r l o g g i n g ; 4) o n l y s e l e c t i v e l o g g i n g permitted; 5) wherever p o s s i b l e f a l l i n g of t r e e s w i t h i n 40 m of the r i v e r to be d i r e c t e d away from i t ; 6) any f e l l e d m a t e r i a l t h a t e n t e r s the r i v e r must be removed; 7) no more than 25% of the b u f f e r zone on e i t h e r s i d e of the Seymour R i v e r between: 1. the southern f o l i o boundary and B l a i s Creek; 2. B l a i s Creek and K i t s o n Creek; 60 3. K i t s o n Creek and the no r t h e r n f o l i o boundary, may be harvested w i t h i n a 25 year p e r i o d ; 8) twenty chains o f r i v e r bank may be exposed to s e l e c t i v e h a r v e s t i n g , but a minimum of 4 00 m of unlogged r i v e r bank must remain between each s e l e c t i v e l y logged area; 9) a l l deciduous and non-merchantable s p e c i e s , snags and wolf t r e e s should be l e f t s t a n d i n g , wherever p o s s i b l e ; 10) road b u i l d i n g w i l l not be p e r m i t t e d w i t h i n the b u f f e r zone except where p h y s i c a l l i m i t a t i o n s d i c t a t e o t h e r -wise . b) F i s h and W i l d l i f e Branch i ) No road b u i l d i n g w i t h i n 2 00 m o f the Seymour R i v e r . i i ) Road to be b u i l t t o the top end of the v a l l e y (north end) and to the west s i d e o f the r i v e r w i t h i n the f i r s t two years of the h a r v e s t i n g l i c e n c e (to f a c i l i t a t e w i l d l i f e c o n t r o l ) . i i i ) Immediately on completion of l o g g i n g , n o n - e s s e n t i a l roads should be r i p p e d up to a l l o w f o r e s t r e g e n e r a t i o n . i v ) Areas des i g n a t e d Mx (along the. Seymour River) to be permanent r e s e r v e s w i t h F i s h and W i l d l i f e having f i n a l say on any l o c a l s e l e c t i v e c u t t i n g . v) Areas designated M 2 (along the Seymour R i v e r ) . No roads or t r a i l s o ther than o f a seasonal nature should be b u i l t w i t h i n 100 m o f meadow edges and no machinery w i t h i n 40 m of meadow edges. No more than 50% o f the canopy should be removed and n a t u r a l r e g e n e r a t i o n should be sought without burning o f s l a s h . a ( I n t e r s p e r s e d M.± and M 2 areas extend along the Seymour Ri v e r from the southern boundary t o 2,00 m n o r t h of K i t s o n Creek). 61 v i ) No l o g g i n g i s allowed i n c a r i b o u (Rangifer tarandus  c a r i b o u Gmelin) and goat (Oreamnos americanus columbiae Rand) areas. (However, t h i s i s not r e s t r i c t i v e as these c o n s t r a i n e d areas c o n t a i n minimal merchantable f o r e s t . ) c) P r o t e c t i o n Two 800 m wide f i r e breaks running e a s t west a c r o s s the f o l i o . i ) F i r e break l o c a t i o n s may be a d j u s t e d from time to time to u t i l i s e and maximise changing and d e v e l o p i n g c o n d i t i o n s , i i ) Logging w i l l o n l y be c o n s i d e r e d i n f i r e breaks when i t w i l l enhance the f u n c t i o n of the breaks and then o n l y a f t e r a s i t e s p e c i f i c f i e l d study. The wording o f these c o n s t r a i n t s and the l o g i c of young and growing ad j a c e n t stands a c t i n g as f i r e breaks i n the f u t u r e suggest t h a t the f i r e breaks are not l o s t t o timber p r o d u c t i o n . d) R e c r e a t i o n No s p e c i f i c c o n s t r a i n t s are i n c l u d e d under t h i s heading. How-ever, the primary r e c r e a t i o n zone extending up the Seymour Ri v e r from the southern f o l i o boundary to j u s t n o r t h o f K i t s o n Creek r e i n f o r c e s the requirement of s e l e c t i o n l o g g i n g s t i p u l a t e d by F e d e r a l F i s h e r i e s and F i s h and W i l d l i f e Branch. I t i s important t o remember t h a t these c o n s t r a i n t s o n l y form the b a s i s o f f i e l d d e c i s i o n s . F a c t o r s o f a d m i n i s t r a t i o n , s u p e r v i s i o n , manpower and f i n a n c e and i n d i v i d u a l i n t e r p r e t a t i o n of the statements have an important impact on the p o l i c i n g o f the v a r i o u s r e s t r i c t i o n s . S u b s t a n t i a l f l e x i b i l i t y i s a l s o allowed f o r i n some of the c o n s t r a i n t s . For example, the p o s s i b i l i t y o f s e l e c t i o n l o g g i n g , t h a t i s " a m e n a b l e " t o t h e F i s h a n d W i l d l i f e B r a n c h , i s a l l o w e d f o r i n t h e Ux r e s e r v e a r e a s . 3 . T h e N o r m a l O p e r a t i o n S i t u a t i o n I n t h i s e x e r c i s e a s i n g l e c o n t r o l f o r c o m p a r a t i v e c o s t i n g i s n o t u s e d a s v a l u e s o f m a n a g e m e n t a l t e r n a t i v e s a r e e x p r e s s e d r e l a t i v e t o o n e a n o t h e r . F o r t h e i n d i v i d u a l t i m b e r c o s t e l e m e n t s , c o n t r o l s a r e u s e d i n t h e r e l e v a n t c o s t i n g s e c t i o n s . R e s e r v e s a r e c o m p a r e d w i t h no r e s e r v e s , s e l e c t i o n w i t h c l e a r c u t , r o a d i n g c o s t s a r e b a s e d o n a p r o g r e s s i v e c l e a r c u t p r e s -c r i p t i o n a n d d i r e c t i o n a l f a l l i n g i s c o n s i d e r e d a s a n a d d i t i o n a l c o s t . S i m i l a r l y s a l m o n v a l u e s u n d e r t h e v a r i o u s t i m b e r h a r v e s t i n g p r e s c r i p t i o n s a r e c o m p a r e d t o t h e " u n d i s t u r b e d " s i t u a t i o n . 4. S i g n i f i c a n t E n v i r o n m e n t a l C o n s t r a i n t s a ) R e s e r v e b) S e l e c t i o n l o g g i n g c ) B u f f e r s t r i p — d i r e c t i o n a l f a l l i n g d) L o c a t i o n o f r o a d s a n d l a n d i n g s e ) T i m i n g o f r o a d b u i l d i n g T h i s c h o i c e i s b a s e d o n f o u r m o n t h ' s e x p e r i e n c e e x a m i n i n g a n d e s t i m a t i n g c o s t s f o r e n v i r o n m e n t a l c o n s t r a i n t s i n a n u m b e r o f r e s o u r c e f o l i o s i n t h e K a m l o o p s F o r e s t D i s t r i c t . A l s o m o s t o f t h e c o n s t r a i n t s r e f e r t o t h e s e f i v e i t e m s . A l t h o u g h t h e f u e l b r e a k s s p e c i f i e d b y p r o t e c t i o n h a v e i m p l i c a t i o n s f o r t i m b e r c o s t s ; r o a d i n g i n p a r t i c u l a r , t h e y a r e i g n o r e d i n t h i s e x e r c i s e . A n a l y s i s i s c o n c e n t r a t e d o n t h e 6 3 i n t e r a c t i o n s between timber values and both salmon and moose v a l u e s . 5. Management A l t e r n a t i v e s The f o l l o w i n g four management p r e s c r i p t i o n s form the b a s i s f o r the a n a l y s i s of environmental c o n s t r a i n t s along the Seymour R i v e r . Increased coverage s u p p o r t i n g an approximation t o marginal a n a l y s i s i s allowed by s e n s i t i v i t y a n a l y s i s o f the more important v a r i a b l e s . a) F u l l 400 m wide r e s e r v e along the Seymour R i v e r . b) B u f f e r s t r i p c orresponding t o the area of the r e s e r v e s t r i p : 50% of area harvested i n each pass. 25 year l e a v e p e r i o d . S e l e c t i o n c u t t i n g w i t h 10% r e s i d u a l volume. c) I n t e r p r e t a t i o n o f c u r r e n t environmental c o n s t r a i n t s : M a areas—permanent r e s e r v e s . M 2 a r e a s — 5 0 % of area h a r v e s t e d i n each. pass. 50% Crown s e l e c t i o n with 40% r e s i d u a l volume. Reduction i n % decay of h a r v e s t from 30 to 25. Roading t o n o r t h end i n f i r s t two ye a r s . For balance o f r i v e r — t h e same as b) above. d) Small c l e a r - c u t b l o c k s . Not examined r i g o r o u s l y (because of s e l e c t i o n b e n e f i t s apparent l a t e r i n the a n a l y s i s ) . Maximum b l o c k s i z e between f o u r and e i g h t ha, f i f t e e n year leave p e r i o d . 6 . H a r v e s t i n g S c h e d u l e s , T i m b e r C o s t E l e m e n t s a n d D i s c o u n t R a t e U n l e s s s p e c i f i e d , p r e s e n t v a l u e s a r e e s t i m a t e d f o r t h e m a n a g e m e n t a l t e r n a t i v e s a c c o r d i n g t o t h e f o l l o w i n g h a r v e s t i n g s c h e d u l e . T h e z o n e s r e f e r t o t h e f o l l o w i n g s e c t i o n s o f t h e S e y m o u r R i v e r ( r e f e r t o F i g u r e 8 - A p p e n d i x V I ) . Z o n e 1 S o u t h e r n f o l i o b o u n d a r y t o B l a i s C r e e k . 2 B l a i s C r e e k t o K i t s o n C r e e k . 3 K i t s o n C r e e k t o n o r t h e r n b o u n d a r y . I t i s a s s u m e d t h a t t h e r e a r e f i v e y e a r s h a r v e s t i n g i n e a c h t h i r d o f t h e f o l i o , p a r t o f w h i c h i s i n t h e a r e a o f i n t e r e s t a d j a c e n t t o t h e S e y m o u r R i v e r . T h e t e r m s t a n d a r d r e f e r s t o h a r v e s t i n g o u t s i d e t h e r i v e r r e s e r v e o r b u f f e r s t r i p . To i l l u s t r a t e t h e e f f e c t s o f t i m i n g a n d o p p o r t u n i t y c o s t , s t a n d a r d c o s t s a r e a p p l i e d t o o p e r a t i o n s i n t h e s e a r e a s ( s e e T a b l e 1 ) . -. F u r t h e r v a r i a t i o n s o f T a b l e 1 a r e c o n s i d e r e d , p a r t i c u l a r l y i n t h e s e c t i o n s o n r o a d i n g a n d s a l m o n v a l u e s . C o s t s t o t i m b e r o p e r a t i o n s a r e e x a m i n e d u n d e r t h e f o l l o w i n g h e a d i n g s : E f f e c t o n a l l o w a b l e c u t R o a d i n g S e l e c t i o n c u t t i n g H a u l i n g D i r e c t i o n a l f a l l i n g A d v e r s e s k i d d i n g The c o s t s a p p r o p r i a t e t o t h e d i f f e r e n t m a n a g e m e n t 65 a l t e r n a t i v e s are then aggregated f o r comparison w i t h the salmon and moose v a l u e s t h a t they are designed to p r o t e c t . Table 1 B a s i c H a r v e s t i n g Schedule T o t a l Merchantable L o c a t i o n of Harvest Year Harvest per year 15 yr leave period 25 yr leave period (1 ,000 m3) 1 85 Zone 1 and standard 2-5 71 Standard 6 71 Zone 2 and standard 7-10 71 Standard 11 64 Zone 3 and standard 12 64 Standard 13-15 71 Standard 16 71 Zone 1 + standard Standard 17-20 71 Standard 21 71 Zone 2 + standard Standard 22-25 71 Standard 26 71 Zone 3 + standard Zone 1 + standard 27-30 71 Standard 31 71 Standard Zone 1 + standard 32-35 71 Standard 36 71 Standard Zone 3 + standard The term " c o n s t r a i n t a r e a " as used i n t h i s study r e f e r s to the F e d e r a l F i s h e r i e s 400 m wide r e s e r v e - b u f f e r zone along the Seymour R i v e r , p l u s the area added by the o v e r l a p p i n g F i s h and W i l d l i f e M A and M 2 areas. Discount Rate The selection of d i s c o u n t r a t e was not researched i n d e t a i l because s e n s i t i v i t y a n a l y s i s of the r e s u l t s allows i n t e r p r e t a -t i o n of the e f f e c t s of d i f f e r e n t d i s c o u n t r a t e s . A l s o , the i s s u e remains undecided and open to p e r s o n a l i n t e r p r e t a t i o n . The c h o i c e of 10% f o l l o w s Teeguarden's (1976) argument i n Chapter VI o f a higher d i s c o u n t r a t e f o r d e p l e t i o n of the s u r p l u s o l d stock of timber (as i s the case i n t h i s example). The main c o n f l i c t i n g r e s o u r c e i s commercial f i s h i n g , a form o f p r i v a t e investment, and t h e r e f o r e s u b j e c t to p r i v a t e i n t e r e s t r a t e s ( i . e . 10% p l u s ) . 7. Opportunity Costs f o r Timber Values Foregone  a) E f f e c t on A l l o w a b l e Cut A f t e r making an important assumption on timber commitment a summary of stand i n f o r m a t i o n i s g i v e n and the foregone timber volumes are estimated. For the v a r i o u s management a l t e r n a t i v e s , stumpages are a p p l i e d t o estimate the foregone r e n t s . Other measures of c o s t i n c l u d i n g employment, v a l u e added and govern-ment revenues ( t a x a t i o n and stumpage) are d i s c u s s e d . F i n a l l y the s e n s i t i v i t y of some of the important v a r i a b l e s i s examined. i ) F u l l volume commitment In t h i s e x e r c i s e i t i s assumed t h a t the a v a i l a b l e c u t i s f u l l y committed. For many of the P.S.Y.Us i n the Kamloops F o r e s t D i s t r i c t the volume commitment i s w e l l i n excess of 8 0% and i n some g r e a t e r than 90% of the a l l o w a b l e c u t (B.C.F.S., 1976e). The volume commitment i n the Shuswap P.S.Y.U. (which i n c l u d e s the Seymour R i v e r f o l i o ) has r e c e n t l y been i n c r e a s e d from 72% (B.C.F.S., 1976e) to 82% (based on f i g u r e s from B.C.F.S., 1976f and B.C.F.S. Annual Report, 1976). C u r r e n t l y the a l l o w a b l e c u t i s being r e v i s e d through the e s t a b l i s h m e n t o f environmental p r o t e c t i o n areas (E.P.As). The o p p o r t u n i t y c o s t to timber of l a n d a l i e n a t i o n i s the value of the reduced supply of a v a i l a b l e timber. i i ) Determination of foregone a l l o w a b l e cut Only summarised data are presented here. For a d d i t i o n a l i n f o r m a t i o n on f o r e s t type: volume c a l c u l a t i o n s and sources of i n f o r m a t i o n r e f e r to Appendix IV. Each management a l t e r n a -t i v e i s c o n s i d e r e d i n t u r n . Management a l t e r n a t i v e a: Seymour R i v e r r e s e r v e s t r i p ( F e d e r a l F i s h e r i e s c o n s t r a i n t ) . Information on merchantable volumes, s p e c i e s composition and f o r e s t types i s given i n Tables 2 and 3. Table 2 Reserve' S t r i p : Merchantable Volume i n M 3 ( c l o s e u t i l i s a t i o n standards 17»5 cm d.b.h. p l u s . Less allowances f o r decay, waste and breakage) Zone F C H Species B S P.W. T o t a l "o Area (ha) 1 527 40923 14430 462 1976 362 58723 19-6 98 2 2118 66980 36990 1274 4596 711 112740 37»6 215 3 2393 52598 60464 3928 7354 1475 128311 42*8 295 T o t a l 5038 160501 111884 56 6 3 139 26 2548 . 29 9773 60 8 o. 1-7 53.5 37*3 1*9 4*6 1-1 100 Timber Species F - Douglas f i r (Pseudotsuga m e n z i e s i i (Mirb.) Franco.) C - Western r e d cedar (Thuja p l i c a t a Donn) H - Western hemlock (Tsuga h e t e r o p h y l l a (Raf) Sarg.) B - Balsam-Subalpine f i r (Abies l a s i o c a r p a (Hook.) Nutt) S —• Western white spruce (Picea g l a u c a (Moench) Voss var a l b e r t i a n a (S.Brown) Sarg.) P.W. Western white pine (Pinus m o n t l c o l a Dougl.) The apparent anomaly i n Table 3 i s e x p l a i n e d by the e x i s t e n c e o f a s u b s t a n t i a l area o f good f o r e s t type w i t h a low s t o c k i n g . Hence the average volume per ha i n the medium type i s h i g h e r than i n the good type. The average r o t a t i o n age f o r the Shuswap P.S.Y.U. i s 9 6 years (B.C.F.S., 1975) . Using the H a n z l i k formula the foregone a l l o w a b l e c u t i s 29 9773 96" = 3123 m 3/year 68 Table 3 Zone 1 2 3 Total Volume (m3) Reserve S t r i p s : F o r e s t S i t e s by Area and Merchantable Volume F o r e s t Type T o t a l Good Medium Poor ha ha ha 60 38 98 81 134 215 127 110 57 295 26 8 282 57_ 60 8 44 46 9 100 131,822 149,149 18,802 299,773 44 50 6 100 A l t e r n a t i v e l y the annual a l l o w a b l e c u t may be estimated from the p r o d u c t i v i t y o f the next crop. T h i s i s o b t a i n e d from the average mean annual increment a t c u l m i n a t i o n age (MAI) (B.C.F.S., 1975). Table 4 Reserve S t r i p : M.A.I. - A l l o w a b l e Cut S i t e MAI. Area T o t a l MAI (m 3/ha/yr) (ha) (m 3/year) Good 3.85 268 1,032 Medium 2.45 282 691 Poor 1.6 8 57 96 T o t a l 1,819 The h i g h e r f i g u r e of 3,123 m 3/year i s used i n e s t i m a t i n g the o p p o r t u n i t y c o s t s t o timber. S i m i l a r l y f o r the a l t e r n a t i v e management regimes s t a n d i n g volumes are used t o c a l c u l a t e the l o s s o f a l l o w a b l e c u t . Management a l t e r n a t i v e b: B u f f e r s t r i p s ( s e l e c t i o n l o g g i n g ) . R e s i d u a l volume 10%. As i t i s very l i k e l y t h a t t h i s volume w i l l be r e c o v e r a b l e a t a l a t e r date, p o s s i b l e impact on the a l l o w a b l e c u t i s ignored. Management a l t e r n a t i v e c: I n t e r p r e t a t i o n of c u r r e n t E n v i r o n -mental C o n s t r a i n t s . Table 5 M ± and M 2 Areas: Merchantable Volumes (m3) C o n s t r a i n t Species Area F C H B S P.W. Total (ha) M a 982 31335 17593 694 343 261 54204 115 M 2 2195 95291 45097 1365 4964 1053 150018 248 In a d d i t i o n there i s an estimated 150,000 m3 i n the F e d e r a l F i s h e r i e s ' b u f f e r s t r i p o u t s i d e the f i s h and w i l d l i f e M1 and M 2 c o n s t r a i n t areas. For the M a area l o s s o f t o t a l volume i s assumed. T h i s i s e q u i v a l e n t t o (54204/96=). 565 m3 per year o f a l l o w a b l e c u t . I t i s estimated t h a t 30% of the volume i n the M 2 area i s not a v a i l a b l e (see the s e c t i o n of s e l e c t i o n c u t t i n g ) . T h i s i s e q u i v a l e n t to 46 9 m3 per year r e d u c t i o n i n a l l o w a b l e c u t . A t o t a l l o s s of 1,034 c u n i t s per year i n a l l o w a b l e c u t i s o b t a i n e d . Management a l t e r n a t i v e d: Small c l e a r c u t b l o c k s — n o l o s s of annual c u t . 70 i i i ) Foregone stumpage . An e s t i m a t i o n of c u r r e n t B.C.F.S. stumpage r a t e s i s gi v e n i n Appendix I I I . From these the average stumpage r a t e s of Table 6 have been c a l c u l a t e d . A p p l i c a t i o n of the e f f e c t on a l l o w a b l e cut, and a d i s c o u n t r a t e of 10% f o r each, r e s u l t s i n the estimates of the foregone stumpage i n present value terms. Table 6 Present Values of Foregone Stumpage: Management A l t e r n a t i v e s a arid c Loss o f Present annual Annual value Stumpage a l l o w a b l e c u t stumpage a t 10% Management a l t e r n a t i v e $1-45/m3 3,123m 3 $4,528 $45,280 a Management (M a $1»47 565 $831 $8,310 a l t e r n a t i v e ( c (M 2 $1«61 469 $755 $7,550 Although i n e f f e c t o n l y one r o t a t i o n p e r i o d has been co n s i d e r e d , the annual amounts were d i s c o u n t e d i n p e r p e t u i t y . The d i f f e r e n c e i n d i s c o u n t i n g over 96 years as a g a i n s t p e r p e t u i t y i s minimal. i v ) Employment, va l u e added arid Government revenues The i n d i c e s used i n t h i s a n a l y s i s are d e r i v e d i n Appendices I, I I and I I I . 1) Employment. D i r e c t employment i n d i c e s ( l o g g i n g and wood processing) of 1*2 and 1*4 man years per 1,000 m3 o f l o g h a r v e s t are used to estimate r e g i o n a l and p r o v i n c i a l impacts 71 r e s p e c t i v e l y . The P r o v i n c i a l index i s higher because of the a d d i t i o n a l p r o c e s s i n g and head o f f i c e personnel i n the l a r g e r c e n t r e s (Vancouver i n p a r t i c u l a r ) . Employment m u l t i p l i e r s f o r i n d i r e c t and induced e f f e c t s of 1*8, 2*45 and 2*8 r e s p e c t i v e l y f o r the l o c a l , d i s t r i c t and p r o v i n c i a l l e v e l s are used (a m u l t i p l i e r of 1*8 means t h a t f o r every d i r e c t job, 0*8 i n d i r e c t and induced jobs are a l s o g e n e r a t e d — a t o t a l employment e f f e c t of 1*8 j o b s ) . The employment e f f e c t s may be t a b u l a t e d as f o l l o w s : a) Management a l t e r n a t i v e a: Loss of employment p o s i t i o n s P r o v i n c i a l D i s t r i c t L o c a l D i r e c t 4 4 4 D i r e c t , I n d i r e c t 12 9 7 and Induced F i g u r e s have been rounded to the n e a r e s t p o s i t i o n . b) Management a l t e r n a t i v e c: Loss of employment p o s i t i o n s P r o v i n c i a l D i s t r i c t L o c a l D i r e c t 1 1 1 D i r e c t , I n d i r e c t .4 3 2 and Induced Although t h i s type of a n a l y s i s i m p l i c i t l y assumes a continuous p r o d u c t i o n f u n c t i o n i t must be remembered t h a t h a r v e s t i n g and s a w m i l l i n g o p e r a t i o n s are d i s c r e t e . I f timber supply drops below a c e r t a i n l e v e l a s h i f t i s h a l t e d or the m i l l c l o s e s down completely. A decrease i n supply as o u t l i n e d here may c o n t r i b u t e to such an a c t i o n . L o c a l knowledge i s important to determine c r i t i c a l supply l e v e l s . In t h i s s i t u a t i o n the p o s s i b l e decrease i n p o t e n t i a l supply does not appear c r u c i a l . 2) Loss of P r o v i n c i a l and F e d e r a l Government Revenues. Management A l t e r n a t i v e s $/m3 a c P r o v i n c i a l manufacturers and employee t a x a t i o n 2*5 7,808 2,5 85 Stumpage 4,52 8 1,586 F e d e r a l manufacturers and employee t a x a t i o n 3*7 11,555 3,826 T o t a l annual Government Revenues $23,891 $79,971 I n d i r e c t and induced p e r s o n a l taxes are excluded as i t i s assumed t h a t s u f f i c i e n t a l t e r n a t i v e jobs and b u s i n e s s o p p o r t u n i t i e s e x i s t elsewhere i n the p r o v i n c i a l economy. Time was not a v a i l a b l e to i n v e s t i g a t e the a l t e r n a t i v e job oppor-t u n i t i e s and the m o b i l i t y of l o c a l l a b o u r ; the i n f o r m a t i o n necessary to s e t t l e t h i s debatable p o i n t . No allowance has been made f o r unemployment b e n e f i t s . 3) Loss of Value Added. (Logging and wood p r o c e s s i n g i n d u s t r y ) Management A l t e r n a t i v e s $/m3 a c 32 $99,936/year $33,088/year The Shuswap D i s t r i c t f a c e s these r e d u c t i o n s i n c o n t r i b u -t i o n s to the economy from the f o r e s t i n d u s t r y . v) Sources of e r r o r - s e n s i t i v i t y a n a l y s i s 1) Area d e t e r m i n a t i o n . The long narrow shape o f the r i v e r r e s e r v e or b u f f e r s t r i p and the numerous type boundaries make i t d i f f i c u l t t o e s t i m a t e . a c c u r a t e l y the areas i n v o l v e d on the map. A l s o the r e s e r v e as drawn i s s u b s t a n t i a l l y wider than 73 400 m i n the southern p o r t i o n because o f numerous meanderings of the r i v e r . A b i a s to over estimate areas i s expected. 2) Volume d e t e r m i n a t i o n . A l a c k of s p e c i f i c f o r e s t stand i n f o r m a t i o n i s a major p o t e n t i a l source of e r r o r . The volumes and s p e c i e s composition are based on B.C.F.S. l o c a l and zonal average volumes per a c r e . For the h i g h e r volume types, these f i g u r e s e x h i b i t standard d e v i a t i o n s of as much as 25%. A l s o the average l i n e i n f o r m a t i o n does not a l l o w f o r breakage and l o g g i n g waste. A standard 20% deduction has been a p p l i e d to cover these f a c t o r s . A s u b s t a n t i a l l y g r e a t e r p r o p o r t i o n of the r e s e r v e area i s i n the good f o r e s t type and l e s s i n the poor f o r e s t type than t h a t f o r the whole P.S.Y.U. T h i s suggests t h a t the average r o t a t i o n age (volume culmination) w i l l be l e s s and the foregone annual a l l o w a b l e cut more than estimated f o r the r e s e r v e area. T r i a l c a l c u l a t i o n s i n d i c a t e t h a t t h i s e r r o r i s u n l i k e l y to add more than 5% to the foregone annual a l l o w a b l e c u t . 3) Value measurements. Over r e c e n t years stumpage r a t e s have v a r i e d s i g n i f i c a n t l y w i t h market c o n d i t i o n s . T h i s i s w e l l i l l u s t r a t e d by the average stumpage valu e s i n Table 24 and F i g u r e 4 of Appendix I I I . One n o t i c e a b l e g e n e r a l t r e n d from these f i g u r e s i s an o v e r a l l d e c l i n i n g r e a l v a l u e of stumpages. Under the r e s i d u a l a p p r a i s a l system,the c o s t s o f environmental c o n s t r a i n t s , and the tendency f o r capture of economic r e n t s by wages c o n t r i b u t e to t h i s t r e n d . Lack of knowledge of c o n d i -t i o n s i n the c o n s t r a i n t area, o f o p e r a t i o n a l plans and of a c t u a l c o s t s , p r e c l u d e s an a c c u r a t e e s t i m a t i o n o f h a r v e s t i n g c o s t s . T h i s and the v a r i a b i l i t y of timber p r i c e s prevent c o n f i d e n t stumpage p r e d i c t i o n s . Recent trends and the s h o r t term outlook suggest., a low stumpage r a t e c l o s e to t h a t used. F i n a l l y the present v a l u e of foregone stumpage i s d i r e c t l y p r o p o r t i o n a l to the stumpage r a t e used. In the e s t i m a t i o n o f s o c i a l c o s t (employment e f f e c t s ) a continuous p r o d u c t i o n f u n c t i o n has been assumed. In r e a l i t y the d i s c r e t e nature of f o r e s t i n d u s t r y p r o d u c t i o n should be taken i n t o account. The m o b i l i t y of the labour f o r c e and o p p o r t u n i t i e s e l s e -where are important c o n s i d e r a t i o n s i n determining the t r u e c o s t to the P r o v i n c i a l economy. For reasons o f time, these f a c t o r s have been ignored i n t h i s e x e r c i s e . Government revenues are a l s o l a r g e l y dependent on market c o n d i t i o n s and f o r t h i s example gross average f i g u r e s from s i x to e i g h t years ago form the b a s i s f o r the f i g u r e s used. Value added f i g u r e s are P r o v i n c i a l averages. 4) I n t e r e s t r a t e . Present v a l u e s are i n v e r s e l y p r o p o r t i o n a l to the i n t e r e s t r a t e used as d i s c o u n t i n g i s o f equal annual amounts i n p e r p e t u i t y . 5) Summary. Sources of e r r o r are l i s t e d i n i n c r e a s i n g order o f l i k e l y magnitude. L i m i t s are s u b j e c t i v e l y d e r i v e d . One (1) r e f e r s to estimates used i n the a n a l y s i s . Source of e r r o r V a r i a t i o n Area 0*8 - 1-0 Volume/acre 0*8 -1*2 Volume 0•6 4 - 1 • 2 75 Source of e r r o r V a r i a t i o n I n t e r e s t r a t e 0 » 6 7 - 2»0 ( 5 % - 1 5 % ) Stumpage 0 * 2 5 - 1 - 5 ( $ 0 ' 4 / c u n i t - $ 2 » 0 / c u n i t ) A l l e r r o r s l i s t e d have p r o p o r t i o n a l e f f e c t s on the estimate of foregone stumpage v a l u e s . The sources of l e a s t c o n f i d e n c e and g r e a t e s t v a r i a b i l i t y of estimates are the market f a c t o r s of stumpage and i n t e r e s t r a t e . b) S e l e c t i o n Logging Management a l t e r n a t i v e s b and c s p e c i f y s e l e c t i o n c u t t i n g i n c l o s e p r o x i m i t y to the Seymour R i v e r . P e r s o n a l i n t e r p r e t a -t i o n of the F e d e r a l F i s h e r i e s and the F i s h and W i l d l i f e c o n s t r a i n t s forms- the b a s i s f o r t h i s p a r t of the a n a l y s i s . In the former a diameter l i m i t c ut i s assumed with the o b j e c t i v e to h a r v e s t as much volume as p o s s i b l e , l e a v i n g o n l y the s m a l l e s t t r e e s . In the l a t t e r a q u a l i t y s e l e c t i o n o p e r a t i o n i s modelled. Dobie, McBride and Mcintosh ( 1 9 7 0 ) ; i n d i c a t e d s u b s t a n t i a l c o s t advantages, r e s u l t i n g from u s i n g the c o n s t r a i n t o f 5 0 % r e s i d u a l canopy to l e a v e the most decadent t r e e s as w e l l as the s m a l l e r stems. A l a c k of s p e c i f i c stand and c o s t i n f o r m a t i o n has r e s u l t e d i n r e l i a n c e on data from nearby cut permits and on the 19 7 7 F o r e s t S e r v i c e a p p r a i s a l manual f o r the Kamloops F o r e s t D i s t r i c t . P o s s i b l e f o r e s t management i m p l i c a t i o n s o f s e l e c t i o n l o g g i n g are d i s c u s s e d , b e f o r e e s t i m a t i n g merchantable volumes and i n v e s t i g a -t i n g p o s s i b l e c o s t e f f e c t s of the proposed h a r v e s t i n g regimes. For more d e t a i l on the e s t i m a t i o n of h a r v e s t i n g c o s t s r e f e r t o Appendix V. 76 I) F o r e s t management c o n s i d e r a t i o n s I t i s important to f i r s t assess the stand s t r u c t u r e b e f o r e the f e a s i b i l i t y of a s e l e c t i o n l o g g i n g o p e r a t i o n can be d e t e r -mined (Thompson, 1977). The volume f i g u r e s show a h i g h percentage of cedar and hemlock, w i t h 53•5 and 37*3 per cent of the t o t a l merchantable volume i n the F e d e r a l F i s h e r i e s b u f f e r zone (see T a b l e 2 ) . The age c l a s s e s and s i t e suggest t h a t the t r e e s are mature or overmature w i t h a s u b s t a n t i a l volume of decay to be expected. A diameter d i s t r i b u t i o n f o r s i m i l a r types l o c a t e d nearby (but a t a higher a t t i t u d e and w i t h a s i g n i f i c a n t percentage of spruce) shows t h a t n e a r l y a l l the s m a l l t r e e s from 2 0 to 4 0 cm d.b.h. are hemlock, spruce and "balsam." With the small percentage of spruce and "balsam" 'estimated f o r the Seymour R i v e r stands i t may be expected t h a t a m a j o r i t y o f the small t r e e s there are hemlock. U n f o r t u n a t e l y no f i g u r e s are a v a i l -a ble f o r d e n s i t y and s p e c i e s composition of advanced r e g e n e r a t i o n l e s s than 20 cm d.b.h. I t i s q u i t e l i k e l y t h a t s e l e c t i o n l o g g i n g w i l l encourage the growth of a hemlock dominated stand, c u r r e n t l y one of the l e s s p r e f e r r e d s p e c i e s . A l s o advanced r e g e n e r a t i o n may be inadequate r e s u l t i n g i n l e s s than f u l l use o f the s i t e f o r timber growth. F i e l d i n s p e c t i o n s and s i t e s p e c i f i c data are r e q u i r e d to f u l l y examine these p o s s i b i l i t i e s . In the lower h a l f of the Seymour R i v e r ' s passage through the f o l i o a r e a , a c o n s i d e r a b l e p r o p o r t i o n of the f o r e s t stands i s on very wet s o i l s adjacent to the r i v e r and swampy meadows. C l e a r c u t t i n g of these stands may r e s u l t i n a r i s e o f the w a t e r t a b l e c a u s i n g problems i n r e g e n e r a t i o n i n some areas. R e t e n t i o n o f 50% of the Crown cover may reduce t h i s tendency. i i ) Merchantable volumes Diameter d i s t r i b u t i o n s f o r two s i m i l a r f o r e s t types i n a nearby c u t permit formed the b a s i s f o r estimates of merchantable volumes a v a i l a b l e i n the proposed s e l e c t i o n l o g g i n g o p e r a t i o n s . Table 7 Species Composition and Volumes i n Comparable Stands: Reserve S t r i p and Nearby Cut Permits F o r e s t type Species Cedar ) ) % o f Hemlock ) c u . ) volume Spruce ) T o t a l merchantable volume per ha (m3) CH-941-M 62 15 22 570 H (PW) -831-M 44 36 17 510 R i v e r Reserve (average) 54 37 5 495 On the b a s i s o f the diameter d i s t r i b u t i o n s f o r these two f o r e s t types, r e s i d u a l volumes were estimated a t 10% f o r the management a l t e r n a t i v e b) and 40% (of which 75% i s permanently l o s t ) f o r the f i s h and w i l d l i f e c o n s t r a i n t i n a l t e r n a t i v e c ) . The b a s i s f o r these statements i s summarised i n Table 8. i l l ) Timber h a r v e s t i n g c o s t s P o t e n t i a l l y important h a r v e s t i n g c o s t f a c t o r s f o r compari-son of a c l e a r c u t and a s e l e c t i o n h a r v e s t i n g o p e r a t i o n may be l i s t e d as p i e c e s i z e e f f e c t s , volume per ha, i n t e r f e r e n c e or 78 care to a v o i d r e s i d u a l t r e e s , r o a d i n g requirements and timber q u a l i t y c o n s i d e r a t i o n s . Table 8 Relevant Diameter D i s t r i b u t i o n Information f o r S e l e c t i o n Logging CH-941-M 39% o f stems and 8*6% of volume l e s s than 40 cm d.b.h. H(PW)-831-M 37% of stems and 9»5% o f volume l e s s than 40 cm d.b.h. CH-941-M 60% of stems and 31»5% of volume l e s s than 55 cm d.b.h. H(PW)-831-M 58% of stems and 27% of volume l e s s than 55 cm d.b.h. CH-941-M 50% of stems l e s s than 40 cm d.b.h. and d i s p e r s e d through other diameter c l a s s e s . C o n t r i b u t e 35 to 40% of the volume. H(PW)-831-M 50% o f stems l e s s than 40 cm d.b.h. and d i s p e r s e d through other diameter c l a s s e s . C o n t r i b u t e 30 to 40% of the volume. I t i s assumed t h a t decay i s not n e c e s s a r i l y concen-t r a t e d i n the l a r g e s t t r e e s . The c o s t s of a l l o w a b l e cut r e d u c t i o n and r o a d i n g r e q u i r e -ments are examined i n other s e c t i o n s . For the low r e s i d u a l volume (10%) o p t i o n i t i s suggested t h a t the c o s t d i f f e r e n c e from c l e a r c u t t i n g w i l l be s l i g h t . Volume per ha harvested i s reduced by onl y 10% from an average of 495 m 3/ha. Some p i e c e s i z e advantages may be expected from l e a v i n g the sm a l l e r t r e e s . However f o r s i m p l i c i t y these b e n e f i t s are c o n s i d e r e d to be o f f s e t by s l i g h t l y slower s k i d d e r t u r n around times r e s u l t i n g from i n t e r f e r e n c e of r e s i d u a l t r e e s . 79 A l s o r e t a i n i n g the s m a l l t r e e s ( o f t e n have a lower % decay content than l a r g e r t r e e s ) may reduce the q u a l i t y o f the ha r v e s t i n terms of p r o p o r t i o n of decayed wood. The c o s t i n g procedures f o r the c o n s t r a i n t s p e c i f y i n g a minimum r e s i d u a l crown cover o f 50% was to i n c o r p o r a t e the b e n e f i t s of l e a v i n g the s m a l l e r t r e e s and the disadvantages of a lower volume per ha i n t o the h a r v e s t i n g c o s t s . These c o s t s are assumed t o be expressed as per m3 of sound wood. I t i s f u r t h e r assumed t h a t firmwood c o s t s w i l l i n c r e a s e i n p r o p o r t i o n to the percentage of decay present (Dobie, 1976). Table 9 shows r e l a t i v e c o s t s o f h a r v e s t i n g ( e x c l u d i n g roading) i n timber o f d i f f e r e n t percentage decay. The base c o s t o f 0% decay c l e a r c u t has been s e t a t zero. For the other c a t e g o r i e s the c o s t s are expressed as d o l l a r s / m 3 a d d i t i o n a l t o the base c o s t . I t i s assumed t h a t l o g s o f g r e a t e r than 50% decay w i l l not be harve s t e d . Table 9 E f f e c t o f % Decay on H a r v e s t i n g Cost per m3 of Firmwood  % Decay E x t r a c o s t s ($/ha) r e s u l t i n g from decay C l e a r c u t S e l e c t i o n 0 0 0-21 10 1-31 1*54 15 2*10 2»33 20 2»95 3*21 25 3«93 4-21 30 5«05 5*35 35 6«35 6«67 40 7*86 8«21 80 Before s p e c i f y i n g f i g u r e s from Table 9 i t i s u s e f u l to examine the p o s s i b l e e f f e c t s of s e l e c t i o n on % decay i n the harvested timber. Table 10 i s b e s t e x p l a i n e d by an example. I f the harvested timber (60% of p r e - h a r v e s t volume) has a decay content of 20% and the r e s i d u a l timber c o n t a i n s 4 0% decay then t h a t of the combined volume ( a v a i l a b l e i n a c l e a r c u t t i n g o peration) i s c a l c u l a t e d to be 28%. The d i f f e r e n c e of 28-20 r e p r e s e n t s the d i f f e r e n c e i n decay content of harvested timber between c l e a r c u t t i n g and the d e f i n e d s e l e c t i o n o p e r a t i o n . Table 10 Percentage Decay I n C l e a r c u t and S e l e c t i o n Operations ( f i g u r e s are average percentage decay) Harvest R e s i d u a l ( s e l e c t i o n - 6 0 % o f (40% o f t o t a l volume) t o t a l volume) T o t a l T o t a l minus Harvest 20 30 40 40 28 34 8 4 For t h i s e x e r c i s e the s e l e c t i o n o p e r a t i o n i s assumed to reduce the h a r v e s t decay percentage from 30 to 25. From Table 10 t h i s i s e q u i v a l e n t to 5*05 minus 4*21 or a s a v i n g of $0*84 per m 3 of h a r v e s t . M i l l i n g c o s t s f o r Northwestern hemlock and cedar, f o r 1975, show an estimated savings of $1*32 per m3 o f l o g s f o r a r e d u c t i o n i n decay per cent from 30 to 25 (Dobie, 1976). D i f f i c u l t y i n e s t a b l i s h i n g the l i k e l y c o s t impact o f the i n t e r f e r e n c e f a c t o r r e s u l t i n g from the r e s i d u a l t r e e s , p r e -cludes i t from the a n a l y s i s . Leaving the decadent t r e e s may 81 c r e a t e a s a f e t y problem^ (Workers Compensation Board, 1978 r e g u l a t i o n 60*38.) F a l l i n g the most u n s t a b l e t r e e s c o u l d r e s u l t i n a d d i t i o n a l c o s t s . P o s s i b l e b e n e f i t s o f changes i n s p e c i e s composition r e s u l t i n g from s e l e c t i o n (would expect s e l e c t i o n a g a i n s t hemlock and i n favour of cedar) are ignored i n the c a l c u l a t i o n s . A change i n h a r v e s t composition from 60% cedar and 40% hemlock to 80% cedar and 20% hemlock, a t stumpages o f $2*12 and $0*4 per m 3 r e s p e c t i v e l y , changes the average stumpage from $1*43 to $1*77 per m3. To complete t h i s a n a l y s i s of s e l e c t i o n c u t t i n g e f f e c t s , the p r e s e n t value of the estimated l o g g i n g and s a w m i l l i n g savings a r e - c a l c u l a t e d and the r e s u l t s are presented i n Table 11 . Table 11 Present Values of S e l e c t i o n B e n e f i t s i n M 2 Areas P r e s c r i p t i o n Present v a l u e a t 10% D i s p e r s e d h a r v e s t i n g 15 year leave p e r i o d 25 year l e a v e p e r i o d $89,267 78,674 F i r s t pass h a r v e s t of c o n s t r a i n t area i n 2 years 15 year leave p e r i o d 25 year leave p e r i o d 109,266 96,297 i v ) S e n s i t i v i t y a n a l y s i s A range of p o s s i b l e v a l u e s i s estimated f o r each major v a r i a b l e . Comments pro v i d e reasons f o r e s t i m a t e s . 82 One (1) r e f e r s to the f i g u r e used i n the c a l c u l a t i o n s . T o t a l volume (from s e c t i o n on a l l o w a b l e c u t e f f e c t s ) 0*64-1*2 Re s i d u a l volume 0*75-1*25 A r e s i d u a l volume of between 30% and 50% f o r a q u a l i t y s e l e c t i o n r e t a i n i n g 50% Crown cover. I n t e r e s t r a t e 0*8-1*3 5%-15% f o r d i s p e r s e d h a r v e s t i n g o p t i o n with a 15 year leave p e r i o d . Reduction i n % decay 0*67-2*0 T h i s r e p r e s e n t s a range of 3 to 10% and covers a d i f f e r e n c e of up to 20% between the t o t a l stand's and r e s i d u a l stand's content o f decay. I t forms the b a s i s f o r the h a r v e s t i n g and s a w m i l l i n g b e n e f i t s d e s c r i b e d below. Ha r v e s t i n g b e n e f i t s 0*64-2*5 f o r a v a r i a t i o n i n c o s t s of $0*53 to $2*12 per m3. For both t h i s element and f o r s a w m i l l i n g c o s t s , two v a r i a b l e s are e f f e c t i v e . One i s the decrease i n firmwood c o s t s with g r e a t e r decrease i n decay. The other i s that a d e f i n e d decrease i n decay p r o v i d e s g r e a t e r b e n e f i t s when i t occurs from h i g h i n i t i a l decay l e v e l s than from a lower l e v e l (the c o s t curve i s convex to the % decay a x i s ) . I t i s assumed t h a t time per stem f o r each of the h a r v e s t i n g phases i s not s i g n i f i c a n t l y a f f e c t e d by percentage of decay i n stems. Sawmilling 0*6-2*7 ($0•71-$3•53/m 3) Obtained from 1975 c o s t curves f o r Northwestern B.C. cedar and hemlock (Dobie, 1976) . Species s e l e c t i o n $0-$0*71/m3 Not allowed f o r i n the a n a l y s i s . Depends on r e l a t i v e stumpage r a t e s and s p e c i e s value as w e l l as s p e c i e s composition and d i s t r i b u t i o n . 83 Scheduling (timing) of the h a r v e s t has a s i g n i f i c a n t impact on the present v a l u e . The sooner the l o g g i n g o p e r a t i o n , the weaker the impact o f d i s c o u n t i n g and the g r e a t e r the s e l e c t i o n v a l u e . T h i s i s w e l l i l l u s t r a t e d i n Tabl e 11, by the range of pr e s e n t v a l u e s f o r d i f f e r e n t h a r v e s t i n g schedules from $79,000 to $109,000. Stand volume, s p e c i e s and decay i n f o r m a t i o n are very important f o r c o n f i d e n t estimates of s e l e c t i o n c u t t i n g c o s t s i n cedar-hemlock stands i n r e l a t i v e l y easy t e r r a i n . Decay i s the g r e a t e s t problem because of i t s v a r i a b i l i t y and the d i f -f i c u l t y o f measuring i t i n sta n d i n g t r e e s . Market f a c t o r s o f i n t e r e s t and stumpage r a t e s are of secondary importance here. c) Roading The environmental c o n s t r a i n t s d e s c r i b e d e a r l i e r , suggest two major p o t e n t i a l impacts on r o a d i n g c o s t s f o r timber e x t r a c t i o n . These are the c o s t s o f road l o c a t i o n and t h a t o f a c c e l e r a t e d d i s p e r s a l of l o g g i n g a c t i v i t y throughout the ar e a . For the former i t would appear t h a t l i t t l e a d d i t i o n a l c o s t i s i n v o l v e d . In the southern s e c t i o n o f the r i v e r i n p a r t i c u l a r , the swamp areas make i t necessary t o l o c a t e the road w e l l away from the r i v e r a t the base of the v a l l e y s l o p e s . A l s o the wording o f the c o n s t r a i n t s allov/s f o r f l e x i b i l i t y t o l o c a t e the road i n the r e s e r v e - b u f f e r area i f necessary t o a v o i d o b s t a c l e s . I t i s f e l t t h a t o f g r e a t e s t concern are the e f f e c t s of leave s t r i p s , r e s e r v e s and s e l e c t i o n c u t t i n g on i n c r e a s i n g e a r l y r o a d i n g requirements, hence ex p e n d i t u r e . Many s t u d i e s f o l l o w the B.C.F.S. a p p r a i s a l procedure o f 84 f u l l a m o r t i s a t i o n of the c o s t s of secondary roads on the c u r r e n t o p e r a t i o n or h a r v e s t i n g pass. To a l l o w f o r p o s s i b l e f u t u r e b e n e f i t s (e.g. road a l r e a d y formed), the method used here i s t o c a l c u l a t e a present value o f the flow of roading c o s t s over time f o r the whole f i r s t h a r v e s t i n c l u d i n g a l l p r e s c r i b e d l o g g i n g passes. The a n a l y s i s f o l l o w s i n o r d e r , from d e f i n i t i o n o f the b a s i c assumptions to an o u t l i n e of the methodology and then to a summary o f the r e s u l t s . Comments on the s e n s i t i v i t y of some of the assumptions and v a r i a b l e s complete the e x e r c i s e . 1) B a s i c assumptions 1) Road d e n s i t y : 1 km to 25 ha o f f o r e s t . L o c a t i o n o f the c o n s t r a i n t area along the main access route i n t o the f o l i o area suggests a high r o a d i n g d e n s i t y . 2) Roading c o s t : Average of $6,215/km. T h i s i s based on f i g u r e s from the 1977 A p p r a i s a l Manual f o r the Kamloops F o r e s t D i s t r i c t . 3) Volume per ha: In the c o n s t r a i n t area 490 m 3/ha f o r c l e a r -cut o p e r a t i o n s . Outside the c o n s t r a i n t area 350 m 3/ha. 4) Area harvested i n each pass: In the c o n s t r a i n t area i t v a r i e s w i t h the p r e s c r i p t i o n . Outside i t i s 50%. 5) Road redevelopment c o s t s : 4 0% o f new road c o s t s . However o n l y h a l f o f t h i s i s allowed f o r i n the c o n s t r a i n t area because of the l a r g e p r o p o r t i o n o f main access road r e q u i r i n g c o n t i n u a l maintenance. 6) Road maintenance c o s t s : These are ignored because o f the l a r g e main access road component r e q u i r i n g annual maintenance to s e r v i c e o p e r a t i o n s a t higher a l t i t u d e s and because of the allowance f o r redevelopment c o s t s . 7) Small c l e a r c u t b l o c k s : Assume an a d d i t i o n a l 20% ro a d i n g i s r e q u i r e d . 11) Procedure The b a s i c h a r v e s t i n g schedule p r e v i o u s l y o u t l i n e d i s used. I f a d d i t i o n a l volume i s r e q u i r e d t o t h a t a v a i l a b l e under the management p r e s c r i p t i o n i n the r e l e v a n t zone i t i s assumed to come from the s t a n d a r d i s e d h a r v e s t i n g c o n d i t i o n s o u t s i d e the c o n s t r a i n t area. A l l the roading expenditures are di s c o u n t e d to the f i r s t year a t 10% d i s c o u n t r a t e and are added together to p r o v i d e the present v a l u e o f the ro a d i n g c o s t s . An example, i s the comparison of a p r o g r e s s i v e c l e a r c u t , w i t h a 50% pass system which has a 25 year leave p e r i o d between passes (Table 12) . Table 12 Year Example o f Determination o f Present Value Roading Costs P r o g r e s s i v e c l e a r c u t ( i n c o n s t r a i n t area) 50% pass system Roading Present v a l u e Roading Present v a l Expenditure (at 10%) Expenditure (at 10%) 1 $42,800 $42,800 $102,800 $102,800 6 35,700 22,166 71,400 44,332 7 35,700 20,153 100,000 56,450 11 32,140 12,390 64,280 24,780 12 32,140 11,265 90,000 31,545 16 100,000 23,940 100,000 23,940 21 100,000 14,860 100,000 14,860 26 100,000 9,230 48,560 4,482 31 100,000 5,730 14,280 818 36 100,000 3,56 0 22,848 814 T o t a l $166,094 $304,821 86 Tabl e 13 R e l a t i v e Present Value Roading Costs f o r Management A l t e r n a t i v e s Management Prescription Leave Period (yrs) Specific Assumptions Progressive clearcut Progressive clearcut Progressive clearcut 50% clearcut 15 50% clearcut 15 50% clearcut 25 50% clearcut 15 25% clearcut 15 25% clearcut 15 Management alternative a 100% reserve Management alternative b (low residual selection) 15 Management alternative c Current constraint interpretation 25 15 25 15 25 Management alternative d Small block size 15 25 Discount Relative Rate Present Value (%) of Road Costs ' (?) 10 0 5 + .126,426 10 - 28,660 Roading costs i n "other" areas are half that of basic assumptions 10 118,959 5 236,108 10 138,727 10 34,206 Roading costs i n "other" areas are half that of basic assumptions 10 213,615 plus 10 166,309 Roading density i n con-straint area i s 60% of basic assumption 10 269,349 Only main access road along river and across river considered 10 137,161 10 154,531 10 179,041 10 189,469 10 159,930 ) Harvest f i r s t pass of 10 175,898 ) ^ v e r s t r i p i n f i r s t two years.as road.is b u i l t to northern end 10 139,713 ) Assumed 20% 10 158,823 ) a d d i t i o n a l roading 8 7 Table 1 2 shows th a t roading i n the 5 0 % pass system costs an a d d i t i o n a l $ 1 3 8 , 7 2 7 i n present value terms a t 1 0 % i n compari-son t o a progressive c l e a r c u t . i l l ) Results This s e c t i o n includes a l i s t of the r e l e v a n t present value r e s u l t s together w i t h s p e c i f i c assumptions as re g u i r e d (Table 1 3 ) . Present values are expressed r e l a t i v e to the progressive c l e a r c u t r e s u l t i n Table 1 2 . D i s c u s s i o n of the r e s u l t s f o l l o w s i n the s e n s i t i v i t y a n a l y s i s and i n the s e c t i o n s on moose and salmon values. i v ) S e n s i t i v i t y a n a l y s i s 1 ) Discount r a t e . In Table 1 3 the present value roading cost f o r the management a l t e r n a t i v e s of progressive c l e a r c u t and a 5 0 % pass system are c a l c u l a t e d a t both 1 0 % and 5%. The t o t a l present value i s shown to be very s e n s i t i v e to i n t e r e s t r a t e . With r e l a t i v e present values of 0 and $ 1 1 8 , 9 5 9 at 1 0 % and $ 1 2 6 , 4 2 6 and $ 2 3 6 , 1 0 8 at 5%. The d i f f e r e n c e s i n present value cost between the management options are a l o t l e s s . At 1 0 % t h i s i s $ 1 1 8 , 9 5 9 , at 5% $ 1 0 9 , 6 8 2 and to continue the example a t 2 . 1 / 2 % i t i s $ 8 4 , 4 1 5 . I t would appear t h a t the s e n s i t i v i t y of comparative r e s u l t s to discount r a t e between 5% and 1 0 % i s r e l a t i v e l y s m a l l . 2 ) Roading cost. In t h i s a n a l y s i s the general f i g u r e s given i n the Forest Service A p p r a i s a l manual have been used. I t i s f e l t t h a t a c t u a l roading c o s t s may be somewhat higher as bridges and la r g e c u l v e r t s have not been allowed f o r , and a s u b s t a n t i a l 88 p r o p o r t i o n of the r o a d i n g w i l l be main a c c e s s . A l s o i t i s i n t e r e s t i n g to note, i n a r e c e n t study, the s u b s t a n t i a l d i f f e r e n c e i n r o a d i n g c o s t estimates of 130% or $19,270/km between the B.C.F.S. (lower f i g u r e ) and the f o r e s t company f o r an o p e r a t i o n i n the C h i l l i w a c k F o r e s t (Benskin, 1975). 3) R e l a t i v e r o a d i n g c o s t s . T h i s a n a l y s i s assumes t h a t r o a d i n g c o s t s per c u n i t are higher o u t s i d e the c o n s t r a i n t area. There-f o r e the e a r l i e r t h a t management a l t e r n a t i v e s p r e s c r i b e l o g g i n g i n the c o n s t r a i n t area, the lower are the t o t a l p r e s e n t values of the roading c o s t . For example i f the f i r s t pass of the r i v e r zone was logged d u r i n g years 1 and 2 i n s t e a d of i n years 1, 6 and 11 the savings i n p r e s e n t v a l u e i s estimated a t $189,469 l e s s $175,898 or a rounded $10,000 f o r a 25-year lea v e p e r i o d . Conversely i f the r o a d i n g c o s t s are lower o u t s i d e the c o n s t r a i n t area ( e v e r y t h i n g e l s e equal) there would be economic i n c e n t i v e to h a r v e s t these areas f i r s t . 4) Road d e n s i t y . Layout f i g u r e s of as low as 20 ha of f o r e s t area per km have been observed f o r areas i n the I n t e r i o r . T y p i c a l l y not a l l the r o a d i n g i s c o n s t r u c t e d f o r the f i r s t pass. In the c a l c u l a t i o n s i t was assumed t h a t a l l r o a d i n g was r e q u i r e d f o r the f i r s t pass because of the l o c a t i o n o f the c o n s t r a i n t area along the main access r o u t e f o r the e n t i r e f o l i o area. T h i s may r e s u l t i n some s l i g h t upward b i a s to the r o a d i n g present v a l u e c o s t s . For r e l a t i v e road d e n s i t i e s between the c o n s t r a i n t area and o t h e r a r e a s , s i m i l a r comments apply t o those as used under roading c o s t s . 89 5) Harvest schedule. T h i s f a c t o r i s v e r y important because of the i m p l i c a t i o n s o f d i s c o u n t i n g over d i f f e r e n t time p e r i o d s . Two main elements are i n v o l v e d ; t h a t o f the t i m i n g and s c a l e of the i n i t i a l h a r v e s t and t h a t of the l e a v e p e r i o d between h a r v e s t s . The b a s i c model used assumes t h a t the f o l i o has a 15 year h a r v e s t p e r i o d , 5 i n each o f the three zones and t h a t o p e r a t i o n s move northwards on a broad f r o n t . The three d e f i n e d zones i n the c o n s t r a i n t area are harvested at 5 year i n t e r v a l s . The F i s h and W i l d l i f e c o n s t r a i n t s s p e c i f y t h a t a road i s b u i l t t o the n o r t h end of the Seymour R i v e r w i t h i n the f i r s t two y e a r s . To take advantage of t h i s requirement, h a r v e s t i n g of" the con-s t r a i n t area should proceed w i t h road c o n s t r u c t i o n b e f o r e o p e r a t i o n s spread to areas f u r t h e r away from the r i v e r . As mentioned under r e l a t i v e r o a d i n g c o s t s , the d i f f e r e n c e i n present value r o a d i n g c o s t s f o r these a l t e r n a t i v e s w i t h a 2 5 year l e a v e p e r i o d between passes i s estimated a t $10,000. The e f f e c t of l e n g t h o f leave p e r i o d i s i l l u s t r a t e d i n Table 13. The p r e s e n t value d i f f e r e n c e between a 15 year and a 25 year leave p e r i o d ranges from $10,000 to $20,000. When the r o a d i n g c o s t s are h i g h e r elsewhere the longer leave p e r i o d ( i n the c o n s t r a i n t area) r e s u l t s i n a higher present v a l u e c o s t . Conversely, i f the r e l a t i v i t y of r o a d i n g c o s t s was r e v e r s e d and c o s t s to reopen roads elsewhere were a l s o lower than i n the c o n s t r a i n t area, then the longer l e a v e p e r i o d ( i n the c o n s t r a i n t area) would r e s u l t i n a lower p r e s e n t v a l u e c o s t . 90 6) Summary. The roading c o s t s , r o a d i n g i n t e n s i t y and volume estimates a l l have p r o p o r t i o n a l e f f e c t s on the present value roading c o s t s . Company estimates of the f i r s t two f a c t o r s (based on experience) should s u b s t a n t i a l l y reduce the range o f p o s s i b l e e r r o r . One (1) r e f e r s t o the e s t i m a t e s used i n the a n a l y s i s . Roading c o s t s 0*8-2*0 ($5,000-$12,000/km) Roading i n t e n s i t y 0*5-1*2 (20 ha-70 ha/km) Volume 0*64-1•2 R e s i d u a l volume 0*75-1*25 From the s e c t i o n on s e l e c t i o n l o g g i n g . Scheduling or t i m i n g of investment i s very important. Present v a l u e s are i n c r e a s i n g l y s e n s i t i v e to changes i n t i m i n g as the p r e s e n t i s approached. The r e l a t i v e magnitude o f r o a d i n g c o s t s i n s i d e the c o n s t r a i n t area as compared to those o u t s i d e i s a l s o very important. F i n a l l y comparative r e s u l t s (comparing management a l t e r n a -t i v e s ) are not very s e n s i t i v e to i n t e r e s t r a t e s . d) H a u l i n g Costs The long narrow shape o f the c o n s t r a i n t area along the Seymour R i v e r suggests t h a t d i s p e r s a l of h a v e s t i n g a c t i v i t y by a s e l e c t i o n c u t t i n g o r a pass c l e a r c u t t i n g system may i n c r e a s e the average h a u l d i s t a n c e and t h e r e f o r e c o s t s . I t i s assumed t h a t t h i s a d d i t i o n a l c o s t occurs o n l y i n the c o n s t r a i n t area as any advancement of l o g g i n g i n other areas may occur i n l o c a t i o n s c l o s e r to as w e l l as f u r t h e r from the sawmill or booming area. i ) Data and assumptions used i n c l u d e : From the F o r e s t S e r v i c e A p p r a i s a l Manual Hauling c o s t per hour $26.70 Average l o a d 34 m3 assume average t r u c k speed of 24 km/hr A d d i t i o n a l average h a u l d i s t a n c e s : - For a 5 0% c l e a r c u t pass system compared to a p r o g r e s s i v e c l e a r c u t 2.4 km. - For the c u r r e n t c o n s t r a i n t i n t e r p r e t a t i o n compared to the 5 0% c l e a r c u t pass system 0*8 km. For each a d d i t i o n a l km i n haul d i s t a n c e the e x t r a c o s t i s $26.70 x 2 x 1 = $0«065/m 3 24 3¥ i i ) R e s u l t s C a l c u l a t i o n o f p r e s e n t v a l u e s f o l l o w e d a format s i m i l a r to t h a t used f o r d i r e c t i o n a l f a l l i n g c o s t s (Table 15). Present value c o s t s of one e x t r a km i n haul d i s t a n c e (at 10%): 15 year lea v e p e r i o d $12,344 25 year lea v e p e r i o d $10,968 i i i ) S e n s i t i v i t y a n a l y s i s Hauling c o s t s 1'0-1'3 ($26-$35/hour) The a p p r a i s a l manual f i g u r e i s $26.70/hour without allowance f o r p r o f i t and r i s k . A study of c o n t r a c t o r s ' f i g u r e s i n d i c a t e s 1976 average c o s t s of $35»21/hour ( i n c l u d i n g p r o f i t and r i s k ) i n the Kamloops area (Young, 1977). 92 Hauling speed 0 * 7 - 1 * 7 ( 1 6 - 4 0 km/p.h.) Average l o a d 0 * 9 - 1 * 0 ( 3 0 - 3 4 m3) f o r an on-highway t r u c k (Kamloops a p p r a i s a l manual). The pr e s e n t v a l u e r e s u l t s are d i r e c t l y r e l a t e d t o these three f a c t o r s . I n t e r e s t r a t e i s important as o n l y the a d d i t i o n a l c o s t s o f hauling are dis c o u n t e d . T h i s d i f f e r s from the s e c t i o n on roading c o s t s where the o p p o r t u n i t y c o s t s of l o g g i n g elsewhere were a l s o c o n s i d e r e d . e) D i r e c t i o n a l F a l l i n g  T a b l e 1 4 Area o f Machine B u f f e r S t r i p Adjacent to the Seymour R i v e r Length o f F o r e s t Area o f Zones R i v e r Boundary B u f f e r S t r i p (m) (ha) 1 1 , 6 0 0 6*4 2 4 , 4 0 0 . 1 7 * 6 3 1 3 , 6 0 0 5 4 * 4 T o t a l 1 9 , 6 0 0 - 7 8 * 4 Volume per ha i s 4 9 0 m3 (average f o r r e s e r v e - b u f f e r a r e a ) . A p p r a i s a l Manual f e l l i n g c o s t $ 1 * 4 8 / m 3 . A d d i t i o n a l c o s t s p l u s 3 0 % or $ 0 * 4 4 / m 3 (Dykstra and F r o e h l i c h , 1 9 7 6 ) Any l o s s of volume i n the machine b u f f e r s t r i p s adjacent-to the Seymour R i v e r and the swamp meadows i s expected to be small and i s ignored i n t h i s e x e r c i s e . Of g r e a t e r i n t e r e s t i s the c o n s t r a i n t r e q u i r i n g f a l l i n g o f t r e e s w i t h i n the 40 m b u f f e r s t r i p away from the r i v e r . The procedure here i s to estimate the area and hence volume o f timber i n v o l v e d . A c o s t i s then a p p l i e d to cover the wedging, j a c k i n g and winching of t r e e s t o d i r e c t them away from the r i v e r . F i n a l l y the standard d i s c o u n t i n g techniques are used to o b t a i n a present value of the c o s t . I f the f i r s t pass o f zone 1 i n the c o n s t r a i n t area i s logged i n year 1 the c o s t i s 6»4 ha x 490 m3 x $0*44 -r 2 (2 passes) = $700. Table 15 Present Values of D i r e c t i o n a l F a l l i n g Costs (at 10%) Year 15 year l e a v e p e r i o d 25 year leave p e r i o d C u r r e n t c o s t Present value C u r r e n t c o s t Present v a l u e 1 $700 $700 $700 $700 6 1 ,925 1,195 1,925 1 ,195 1 1 5,950 2,294 5,950 2,294 16 700 168 17 21 1 ,925 286 26 5,950 549 700 65 31 1 ,925 110 36 5,950 212 T o t a l , $ 5 / 1 9 2 $3/876 T h i s c o s t item i s r e l a t i v e l y s mall compared to the other f a c t o r s d i s c u s s e d . f) Marking I f the F i s h and W i l d l i f e Branch agreed to s e l e c t i o n c u t t i n g i n the M± r e s e r v e areas i t i s expected t h a t marking of the stands would be r e q u i r e d p r i o r to h a r v e s t i n g o p e r a t i o n s . A p p r a i s a l manual c o s t s f o r marking about 50% of the stems i s $43'24 per ha. The t o t a l area i n v o l v e d c o u l d be as much as 115 ha w i t h a present v a l u e a t 10% d i s c o u n t r a t e f o r a 15 year leave p e r i o d of $2,271. g) Adverse S k i d d i n g The F e d e r a l F i s h e r i e s c o n s t r a i n t of no l a n d i n g s i n the b u f f e r zone i m p l i e s adverse s k i d d i n g of the area. From the t o p o g r a p h i c a l map, s l o p e s exceed 30% on s c a t t e r e d areas i n the southern h a l f o f the b u f f e r zone and more g e n e r a l l y i n the n o r t h . In these steeper areas contour t r a c k i n g would be r e q u i r e d f o r s k i d d i n g . The c o s t would be higher and s i t e d i s t u r b a n c e and sedimentation from the s k i d t r a i l s may exceed t h a t of temporary roads and l a n d i n g s . Use of a c a b l e system appears i m p r a c t i c a l w i t h the low l e v e l of c a b l e - l o g g i n g experience c u r r e n t l y a v a i l a b l e i n the d i s t r i c t . S e l e c t i o n requirements of 50% r e s i d u a l Crown cover i n the M 2 areas s e r i o u s l y a f f e c t s p o t e n t i a l p r o d u c t i v i t y . The M i n i - A l p c a b l e yarder has been used s u c c e s s f u l l y f o r douglas f i r and hemlock t h i n n i n g s on Vancouver I s l a n d (Oswald, 1974). Along the Seymour R i v e r the l a r g e cedar and hemlock lo g s r e q u i r e a b i g g e r machine. The l o c a l l y produced Sidewinder has p o t e n t i a l i n such o p e r a t i o n s ( C o t t e l l , 19 78). However u n l e s s the v a l u e of cedar i n the area i s s u f f i c i e n t l y h i g h , s e l e c t i o n by Cable Systems i s u n l i k e l y . More p r o d u c t i v e c l e a r c u t o p e r a t i o n s w i l l ' have f i r s t o p t i o n on i n c r e a s i n g l o c a l experience and c a p i t a l i n v e s t e d i n c a b l e systems. In c o n c l u s i o n , t h i s q u a l i t a t i v e a n a l y s i s suggests t h a t l o g g i n g without l a n d i n g s i n the c o n s t r a i n t area i s c u r r e n t l y i m p r a c t i c a l . A l s o d i s t u r b a n c e would be minimised by the c o n s t r a i n t of w i n t e r o p e r a t i o n s and prompt r e v e g e t a t i o n o f la n d i n g s and t r a i l s would h e l p . h) Summary o f Foregone Timber Values The foregone timber v a l u e s l i s t e d below'by major c o s t items, f o r each management a l t e r n a t i v e , a re pr e s e n t v a l u e s a t a 10% d i s c o u n t r a t e . They are r e l a t i v e to a "normal" o p e r a t i o n d e f i n e d as a p r o g r e s s i v e c l e a r c u t , u n c o n s t r a i n e d by r e s e r v e s o r b u f f e r s t r i p s and i n which the f o r e s t zones i n the c o n s t r a i n t area are ha r v e s t e d a t 5 year i n t e r v a l s b e g i n n i n g i n year 1. Management A l t e r n a t i v e a - Reserve E f f e c t s on a l l o w a b l e cut -$ 45,280 Roading -$269,350 T o t a l -$314,630 Management A l t e r n a t i v e b - S e l e c t i o n Logging-10% R e s i d u a l Volume 2 5 year 15 year leave p e r i o d l e a v e p e r i o d Roading -$154,531 -$137,161 Hauling -$30,884 -$34,755 D i r e c t i o n a l F a l l i n g -$3,876 -$5,192 T o t a l -$189,291 -$177,108 96 Management A l t e r n a t i v e c - The Current C o n s t r a i n t P o s i t i o n Harvest f i r s t pass i n f i r s t 2 years Leave p e r i o d (yrs) 25 15 25 15 E f f e c t s on a l l o w a b l e cut -$15,860 -$15,860 -$15,860 -$15,860 S e l e c t i o n b e n e f i t s + 78,674 + 89,267 + 96,297 +109,266 Roading -189,469 -179,041 -175,898 -159,930 Haul i n g - 35,296 - 39,720 - 34,280 - 38,492 D i r e c t i o n a l f a l l i n g - 3,876 - 5,192 - 9,957 - 8,775 T o t a l $165,827 -$150,54 6 -$139,698 -$113,791 Management A l t e r n a t i v e d - Small C l e a r c u t Blocks Leave p e r i o d 2 5 years 15 years Roading -$1'58,823 -$139 ,713 Hauling - 26,472 - 29 ,792 D i r e c t i o n a l f a l l i n g - 3,876 - 5 ,192 T o t a l -$18 9,171 -$174 ,697 A d d i t i o n a l c o s t s f o r b l o c k l a y o u t and l a n d i n g s (not estimated) would i n c r e a s e these p r e s e n t value c o s t s to something g r e a t e r than those i n management a l t e r n a t i v e b. D i s c u s s i o n The dominant c o s t impact i s t h a t of r o a d i n g . S e n s i t i v e v a r i a b l e s i n c l u d e those of t i m i n g , r e l a t i v e r o a d i n g c o s t s , c o s t s of roads and i n t e n s i t y of r o a d i n g . The estimated o p p o r t u n i t y c o s t s , o f r o a d i n g a l l o w f o r the e f f e c t of h a r v e s t i n g p r e s c r i p t i o n s i n the c o n s t r a i n t area on the t i m i n g of ro a d i n g elsewhere as w e l l as w i t h i n the study area. Comparable prese n t value roading c o s t s (between management p r e s c r i p t i o n s ) are i n s e n s i t i v e to i n t e r e s t r a t e s (5%-12%) . The important g e n e r a l assumption of h i g h e r roading c o s t s elsewhere r e s u l t s i n h i g h e r present v a l u e s with l o n g e r leave p e r i o d s and w i t h higher i n t e r e s t r a t e s . T h i s i s i n c o n t r a s t to the other present v a l u e s c o s t s which are very s e n s i t i v e t o i n t e r e s t r a t e , and are h i g h e r w i t h s h o r t e r leave p e r i o d s and lower i n t e r e s t r a t e s . For these c o s t s of s e l e c t i o n , h a u l i n g and d i r e c t i o n a l f a l l i n g , no attempt has been made to view them i n o p p o r t u n i t y c o s t terms. Rather they have been analysed as c o s t s or b e n e f i t s a d d i t i o n a l t o standard c o s t s i n the c o n s t r a i n t area. The o v e r a l l r e s u l t s depend on the assumptions i m p l i c i t i n the idea of s e l e c t i o n b e n e f i t s a v a i l a b l e from a s i g n i f i c a n t r e d u c t i o n i n decay, i n harvested timber, r e s u l t i n g from s e l e c t i o n f o r q u a l i t y . T h i s makes management a l t e r n a t i v e c the most a t t r a c t i v e i n p r e s e n t v a l u e terms. The advantage would be i n c r e a s e d s u b s t a n t i a l l y i f the q u a l i t y timber p r e s c r i p -t i o n was extended beyond the M 2 areas to the U± r e s e r v e areas and to the area n o r t h of K i t s o n Creek. Assumptions on stand s t r u c t u r e , p o t e n t i a l decrease i n decay i n harvested timber and the e f f e c t s of t h i s on h a r v e s t i n g and s a w m i l l i n g c o s t s are important to the r e s u l t s . The F i s h and W i l d l i f e c o n s t r a i n t s p e c i f y i n g road c o n s t r u c -t i o n t o the north end of the Seymour R i v e r w i t h i n the f i r s t two years of o p e r a t i o n s i s i n t e r e s t i n g . L o g i c a l l y i t would pay t o h a r v e s t the timber along the r i v e r as the road i s b u i l t ; o t h e r -wise a d d i t i o n a l e a r l y r o a d i n g investment i s r e q u i r e d . T h i s suggests h a r v e s t i n g the f i r s t pass of the c o n s t r a i n t area i n the f i r s t two years of o p e r a t i o n s . The p r e s e n t value r e s u l t s f o r 98 o p t i o n c show b e n e f i t s of $26,000 f o r a 25 year p e r i o d and $37,000 f o r a 15 year l e a v e p e r i o d from i n c r e a s e d s e l e c t i o n advantages and decreased road o p p o r t u n i t y c o s t s f o r t h i s p r e s c r i p t i o n . The present v a l u e s of a l l o w a b l e c u t e f f e c t s (foregone stumpage) are r e l a t i v e l y small compared to those of r o a d i n g and s e l e c t i o n . The p r i n c i p l e o f a l l o w a b l e c u t spreads the c o s t s out a n n u a l l y f o r 96 years i n the Seymour P.S.Y.U. The other c o s t s a l l occur w i t h i n 36 years, w i t h a s u b s t a n t i a l p r o p o r t i o n i n the f i r s t 11 y e a r s . Hence the impact o f d i s c o u n t r a t e i s g r e a t e r i n the a l l o w a b l e c u t procedure than i n the s h o r t term p l a n n i n g o u t l o o k . By u s i n g the d i f f e r e n t c o s t i n g methods, r e l a t i v e l y l e s s weight (cost) i s a t t r i b u t e d to decreases i n timber supply than t o r o a d i n g and ot h e r c o s t s . 8. Other Resource Values a) Moose valu e s The c o n s t r a i n t s s p e c i f i e d t o p r o t e c t moose are the M ± r e s e r v e areas and the M 2 s e l e c t i o n a r e a s . i ) My r e s e r v e areas; I f they are maintained as r e s e r v e s , the presen t v a l u e of the foregone stumpage r e t u r n s i s estimated at $8,310. As c o n s t r a i n t s to p r o t e c t salmon v a l u e s r e q u i r e a 2 pass system, the prese n t v a l u e roading c o s t i s estimated by comparing a 50% pass h a r v e s t system and the r e s e r v e s . An approximation i s ob t a i n e d from r e l a t i v e s i z e s o f the M1 r e s e r v e area and the F e d e r a l F i s h e r i e s r e s e r v e area (management a l t e r n a t i v e a) and u s i n g the r o a d i n g c o s t f o r the l a t t e r . The present v a l u e of r o a d i n g c o s t i s estimated a t $22,560. i i ) M 2 s e l e c t i o n areas. The summary of foregone timber v a l u e s shows t h a t the advantages o f q u a l i t y s e l e c t i o n outweigh the disadvantages o f a d d i t i o n a l r o a ding c o s t s . T h i s c o n s t r a i n t i s t h e r e f o r e ignored. The problem of low q u a l i t y r e s i d u a l stands would be d e f e r r e d to f u t u r e g e n e r a t i o n s . i l l ) Moose v a l u a t i o n . Accurate estimates of the Seymour moose p o p u l a t i o n and the corresponding hunter e f f o r t are not a v a i l a b l e . Between ten and f i f t e e n animals have been s i g h t e d from the a i r by l o c a l F i s h and W i l d l i f e o f f i c e r s . I t i s assumed t h a t the moose p o p u l a t i o n i s s t a b l e a t twenty animals. An i m p l i e d p r e s e n t v a l u e f o r a moose i s 30,870 or $1,543. At an ~2"0" i n t e r e s t r a t e of 10% t h i s i s e q u i v a l e n t to an annual value of $154 per moose. These r e s u l t s depend very much on i n t e r p r e t a t i o n of c o n s t r a i n t s and assumptions of p o p u l a t i o n s i z e . The approach here has been to assume t h a t moose va l u e s are of secondary importance to salmon. Only c o n s t r a i n t s and t h e i r c o s t s to timber which are a d d i t i o n a l t o those f o r salmon p r o t e c t i o n are a c c r e d i t e d to moose v a l u e s . b) Salmon v a l u e s 1 ) Impacts of Togging a c t i v i t y d u r i n g the i n c u b a t i o n p e r i o d of  salmon (with S p e c i a l r e f e r e n c e to the Seymour R i v e r spawning  groundl ~ ~ Three main r e f e r e n c e s a r e used i n t h i s s e c t i o n . Crow, Rajagopal and Schreuder (1976) summarisedinformation from approximately 150 s t u d i e s i n Western U n i t e d S t a t e s and Canada. 100 McMynn (1970) referred p a r t i c u l a r l y to the p r o t e c t i v e f u n c t i o n s of leave s t r i p s a djacent t o streams and Slaney (1975) reported on one of the few r e l e v a n t s t u d i e s i n the I n t e r i o r o f B r i t i s h Columbia. S i t e s p e c i f i c c o n d i t i o n s are very important to d e t e r -mining the impact of l o g g i n g on l o c a l f i s h p o p u l a t i o n s . U n f o r t u n a t e l y very l i t t l e i n f o r m a t i o n i s a v a i l a b l e on the Seymour R i v e r . To begin with some f a c t s : In the Seymour R i v e r , the main concern i s w i t h the sockeye salmon spawning ground 20 t o 25 km below the resource f o l i o a r e a. Peak spawning a c t i v i t y u s u a l l y occurs i n the l a s t week of August and the f i r s t week i n September. The eggs incubate i n the stream bed d u r i n g the winte r and by the end of May the f r y have migrated downstream to Shuswap Lake, where they remain f o r a year. "There are three times d u r i n g the i n c u b a t i o n p e r i o d when the embryo are extremely s u s c e p t i b l e to poor environmental c o n d i t i o n s . A f t e r the female l a y s her eggs the s h e l l s are s o f t and the eggs are s u s c e p t i b l e to any g r a v e l movement. They are a l s o very s e n s i t i v e to hig h temperatures a t t h i s time. During development of the c i r c u l a t o r y system and j u s t p r i o r t o h a t c h i n g the oxygen demands o f the embryo are h i g h e s t and the embryos are s e n s i t i v e t o reduced oxygen l e v e l s . " (Crow, e t a_l. , 1976) High temperature may a l s o i n f l u e n c e the spawning f i s h ' s a b i l i t y to l a y eggs. The environmental f a c t o r s of sediment, tempera-t u r e , oxygen l e v e l s and stream flow, important f o r s u c c e s s f u l salmon i n c u b a t i o n , may be s t r o n g l y i n f l u e n c e d by l o g g i n g a c t i v i t y . Each of these f a c t o r s i s c o n s i d e r e d i n t u r n . 101 1) E f f e c t s o f l o g g i n g on sediment. Sediment can p l u g the spaces between the g r a v e l p a r t i c l e s on the streambed, r e d u c i n g the oxygen a v a i l a b l e and the c a p a b i l i t y f o r the removal of waste products to the d e v e l o p i n g f i s h embryos (McMynn, 1970). The amount of sediment depends l a r g e l y on annual streamflow, the v a r i a t i o n s i n r u n o f f and the s l o p e of the b a s i n . F u r t h e r i t i s o f t e n quoted t h a t 80% of the sediment produced by l o g g i n g o p e r a t i o n s i s due t o r o a d i n g (Crow, e t a l . , 1976). T h i s u n d e r l i n e s the importance o f l o c a t i n g roads away from r e a d i l y e r o d i b l e s o i l s i f p o s s i b l e (Slaney, 1975). A l s o i t i s important to p l a n l a n d i n g and s k i d l a y o u t to keep machines away from the stream edge as the t r a n s p o r t of s o i l s from banks can be s i g n i f i c a n t and augment downstream sediment loads i n more important reaches (Slaney, 1975). Some r e s e a r c h shows t h a t most logged watersheds can r e -e s t a b l i s h a f a v o u r a b l e f i s h h a b i t a t i n a r e l a t i v e l y s h o r t time, p r o v i d i n g adequate p r o t e c t i o n i s g i v e n to streams and care i s taken i n the l o c a t i o n and c o n s t r u c t i o n of roads (McMynn, 1970). R i p a r i a n s t r i p s can be e f f e c t i v e i n r e d u c i n g o v e r l a n d sediment flow and stream bank slumping but i n e f f e c t i v e i n re d u c i n g sediment t r a n s p o r t from c u t and f i l l s l o p e s i n t o the s m a l l t r i b u t a r y drainages i n t e r s e c t e d by roads (Slaney, 19 75). 2) E f f e c t s o f l o g g i n g on stream temperatures. Logging to the stream edge tends to i n c r e a s e stream temperatures i n summer, decrease them i n w i n t e r and i n c r e a s e the d i u r n a l v a r i a t i o n (Crow, e t a l . , 1976). Increased stream temperatures r e s u l t i n i n c r e a s e d meta-1 0 2 b o l i c r a t e and maintenance requirements, i n c r e a s e d s t r e s s and a g g r e s s i o n and i n c r e a s e d a c t i v i t y o f pathogenic organisms. Lower winter temperatures c o n s i d e r a b l y extend the i n c u b a t i o n p e r i o d , exposing the eggs f o r a longer time to the r i g o u r s o f the environment (McMynn, 1 9 7 0 ) . The s m a l l e r the stream flow and the l a r g e r the s u r f a c e a r e a , the g r e a t e r i s the impact of v e g e t a t i o n removal on stream temperatures (Crow, e t a l . , 1 9 7 6 ) . P r o t e c t i o n of s m a l l head-water streams i s , t h e r e f o r e , most important. The main Seymour Ri v e r i s r e l a t i v e l y l a r g e with a h i g h flow f o r much of the 'year. A l t e r n a t i v e c u t and r e s e r v e s t r i p s a long a stream do. not u s u a l l y a d v e r s e l y a f f e c t stream temperatures as a stream r e -e n t e r i n g a shaded area c o o l s r a p i d l y (McMynn, 1 9 7 0 ) . Spawning time i n the Seymour R i v e r i s two and a h a l f months beyond the mid-summer heat and the most d i r e c t s u n l i g h t . To date temperature has r a r e l y been c o n s i d e r e d c r i t i c a l . A r i p a r i a n s t r i p s u f f i c i e n t t o shade the stream i s the most e f f e c t i v e way o f moderating temperatures. Temperature e f f e c t s o f l o g g i n g c o u l d be of s h o r t d u r a t i o n depending on the speed of regrowth of r i p a r i a n v e g e t a t i o n . -3) E f f e c t s of l o g g i n g oh oxygen l e v e l s . Oxygen l e v e l s a v a i l a b l e to the embryos i n the spawning g r a v e l are mainly a f f e c t e d by sedimentation and temperature, both o f which have been d i s c u s s e d above. F i n e sediment t r a p s o r g a n i c matter i n the g r a v e l bed, which decomposes c r e a t i n g an oxygen demand and r e d u c i n g the concen-103 t r a t i o n of d i s s o l v e d oxygen i n the g r a v e l (Crow, e t a l . , 1976). Increased temperature reduces the s a t u r a t i o n l e v e l s of oxygen i n water. B u f f e r s t r i p s can be e f f e c t i v e i n p r e v e n t i n g a r e d u c t i o n i n d i s s o l v e d oxygen (Crow, e t aJL. , 1976). 4) E f f e c t s of l o g g i n g on streamflow. In g e n e r a l water y i e l d i n c r e a s e s i n logged watersheds because o f e l i m i n a t i o n o f a l a r g e p r o p o r t i o n o f the v e g e t a t i o n r e s p o n s i b l e f o r t r a n s p i r a -t i o n and e v a p o r a t i o n (McMynn, 1970). Minimum flows are g e n e r a l l y i n c r e a s e d and peak flows are o f t e n sooner and h i g h e r than b e f o r e removal o f the timber. For example i n the Hubbard Brook watershed, c l e a r f e l l e d and kept f r e e of growth f o r two y e a r s , the annual stream flow was 39% and 28% g r e a t e r i n the f i r s t and second years r e s p e c t i v e l y , than would have been expected i f the f o r e s t had not been f e l l e d (Likens and Borman, 1970). With r e y e g e t a t i o n of the c u t o v e r , these e f f e c t s decrease q u i c k l y and i f l e s s than 20% of the watershed i s c u t , i n c r e a s e s i n flow are d i f f i c u l t t o d e t e c t (Crow, e t a l . , 1976). C l e a r c u t t i n g tends to i n c r e a s e the r a t e of snowmelt and t h e r e f o r e i n c r e a s e f l o o d i n g w h ile p a r t i a l c u t t i n g reduces the f l o o d l e v e l w h i le i n c r e a s i n g the d u r a t i o n of peak flows (Crow, e t a l . , 1976) Increased peak flows are d e t r i m e n t a l to f i s h l i f e i n s e v e r a l ways. They cause abnormal g r a v e l s h i f t i n g r e s u l t i n g i n s c o u r i n g of i n c u b a t i n g f i s h embryos and they a c c e l e r a t e bank c u t t i n g c a u s i n g i n c r e a s e d sedimentation. Stream flows i n the resource f o l i o area are going to be 1 04 l i t t l e a f f e c t e d by c u t t i n g p r a c t i c e s i n the r e s e r v e - b u f f e r s t r i p because i t r e p r e s e n t s a r e l a t i v e l y s m a l l p r o p o r t i o n of the t o t a l f o r e s t area and i t i s l o c a t e d on the e a s i e r s l o p e s ( e s p e c i a l l y i n the south) adjacent to the r i v e r . Of g r e a t e r importance i s the c u t t i n g s t r a t e g y adopted f o r the remaining 80% o f the f o r e s t area on the steep s l o p e s f u r t h e r from the stream. 5) Examination o f environmental c o n s t r a i n t s . From the l i t e r a t u r e i t appears t h a t a 200 m wide r e s e r v e on e i t h e r s i d e of the r i v e r i s an i n e f f i c i e n t means o f p r o t e c t i n g the stream environment. I t would p r o v i d e no more shade f o r the r i v e r , p r o t e c t i o n from streambank e r o s i o n , or a d d i t i o n a l food than a narrow s t r i p . I t may help to f u r t h e r reduce o v e r l a n d flow of d e b r i s i n steep areas. However t h i s would be s m a l l compared to sedimentation from r o a d i n g . F i n a l l y the wider s t r i p i s not expected to s i g n i f i c a n t l y i n f l u e n c e stream flow. Instead a narrow b u f f e r zone o f 20 to 40 m width i s i n d i c a t e d . H a r v e s t i n g o f merchantable t r e e s i n the zone i s supported as long as machinery i s excluded from the s t r i p . A l s o the s t r i p need not be continuous. The p o s s i b i l i t y of windthrow should be c o n s i d e r e d as i t tends to r e s u l t i n slumping o f stream banks s u p p l y i n g a d d i t i o n a l d e b r i s to the r i v e r . E n v i r o n m e n t a l l y , the r e s u l t s may be s i m i l a r to c l e a r c u t t i n g (Slaney, 1975). Some p o i n t s to be looked f o r i n c l u d e the s t a b i l i t y of the r i v e r banks, the prevalence o f blowdown i n l o c a l leave s t r i p s and b l o c k p e r i -meters, exposure to storm winds and s o i l c o n d i t i o n s (Moore, 1977). 105 For example, i f the wet s o i l s a djacent to the r i v e r i n the southern p a r t of the f o l i o are shallow r o o t e d there may be windthrow. Removal of the l e a s t windfirm t r e e s would a l l e v i a t e the p o t e n t i a l problem. Winter l o g g i n g i s supported, as t h i s i s the season o f l e a s t f i s h v a l u e s i n the r i v e r and i n the lower s e c t i o n s access i s e a s i e r when the wet s o i l s are f r o z e n . Care should be taken to f l a g ( i d e n t i f y ) stream channels or the s k i d t r a i l l a y o u t to prevent s k i d d i n g adjacent to the r i v e r and d e b r i s accumulation (Slaney, 1975). R e s t r i c t i o n s to s e l e c t i o n l o g g i n g i n the b u f f e r zone appear to l a c k support. The impact of l o g g i n g on stream flows w i l l depend more on c u t t i n g p r a c t i c e s i n the catchment h i n t e r l a n d . The environmental impact over which l e a s t c o n t r o l i s a v a i l a b l e i s t h a t of sedimentation. I t i s a l s o o f t e n c i t e d as the main source of m o r t a l i t y i n the redd ( g r a v e l nest i n which the salmon eggs are l a i d ) (Crow, e t a l . , 1976). The l o c a t i o n and c o n s t r u c t i o n of roads are o f paramount s i g n i f i c a n c e i n i n f l u e n c i n g the r a t e of sedimentation. More a t t e n t i o n to i n i t i a l p l a n n i n g and s u p e r v i s i o n of r o a d i n g i s important. Care i n the c o n s t r u c t i o n o f roads c r o s s i n g s i d e streams on the steep s l o p e s away from the r i v e r warrants emphasis. The e f f e c t s of v a r i a t i o n i n l o g g i n g i n t e n s i t y and methods on sedimentation are p o o r l y documented. For t h i s e x e r c i s e h a r v e s t i n g schedules are based on a 50% pass system. The F e d e r a l F i s h e r i e s c o n s t r a i n t o f 25% o f the area logged i n each 25 year p e r i o d i s i n t e r p r e t e d as a p p l y i n g to the t o t a l area. 106 The southern boundary of the resource f o l i o i s 2 0 km above the northern reaches of the spawning ground i n the b e t t e r years and 2 5 km n o r t h i n the poorer spawninq y e a r s . T h i s allows a s u b s t a n t i a l o p p o r t u n i t y f o r d i l u t i o n o f the sediment e f f e c t o f l o g g i n g , by d e p o s i t i o n o f sediment i n the i n t e r v e n i n g meanderings o f the r i v e r . 11) P o p u l a t i o n information'-Sources of data i n c l u d e the I n t e r n a t i o n a l P a c i f i c Salmon Commission and correspondence between the F e d e r a l F i s h e r i e s S e r v i c e and the B.C.F.S. The lower Seymour R i v e r i s one of the more important spawning grounds f o r sockeye salmon i n the F r a s e r River;' system. S u b s t a n t i a l v a r i a t i o n i n recorded spawners and the commercial c a t c h based on a fo u r vear c y c l e i s apparent (see Table 16). Table 16 S t a t i s t i c s on Seymour Sockeye P o p u l a t i o n (1962-1975) Year Commercial c a t c h (numbers) Spawners (numbers) 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 176,000 114,000 18,000 35,000 141,000 220,000 22 ,000 58,100 71,700 2,700 7,000 28,750 13,360 3,960 7,300 12,000 19,000 2,900 2,900 45,000 37,000 107 For a n a l y t i c a l purposes a commercial c a t c h of 25,000 i n a poor year and 175,000 i n a good year i s assumed. An estimated average annual c a t c h o f 2,0 00 sockeye i s a v a i l a b l e to the n a t i v e I n d i a n food f i s h e r y . A v a r i a t i o n from 3,000 to 1,000 i s assumed t o occur between good and poor y e a r s . For t h i s e x e r c i s e r e c r e a t i o n v a l u e s are a c c r e d i t e d o n l y to the s m a l l runs of up to 1,000 coho (Oncorhynchus  k i s u t c h ) and 50 0 chinook (Oncorhynchus tshawytscha) salmon a year. I t i s assumed t h a t average runs are h a l f these f i g u r e s and t h a t each spawning f i s h c o n t r i b u t e s f i v e f i s h to r e c r e a -t i o n . T h i s amounts to 2,500 coho and 1,250 chinook a year. Rainbow t r o u t (Salmo g a i r d n e r i ) have been observed i n the upper Seymour and i t i s suspected t h a t d o l l y varden char ( S a l v e l i n u s malma) a l s o are p r e s e n t . L i t t l e f i s h i n g occurs a t p r e s e n t although t h i s c o u l d change with improved access from l o g g i n g a c t i v i t y . No v a l u e s are c a l c u l a t e d . i l l ) P a r t i a l h a b i t a t a n a l y s i s An important q u e s t i o n might be: i s i t v a l i d to a c c r e d i t a l l the value o f the salmon p o p u l a t i o n s spawning i n the Seymour R i v e r to o n l y a s m a l l p o r t i o n of the l a n d area t h a t i n f l u e n c e s t h e i r h a b i t a t ? Salmon numbers are s e n s i t i v e to environmental c o n d i t i o n s ( i n c l u d i n g man's c a t c h i n g a c t i v i t y ) i n Shuswap Lake, the m i g r a t o r y route and the sea as w e l l as the spawning ground. F u r t h e r the major t r i b u t o r y , R atchford Creek, and the s m a l l e r Mcnomee stream, d r a i n a combined area as l a r g e as the Seymour resource f o l i o area and they j o i n the main r i v e r above and i n between spawning grounds. 108 The problem i s t h a t i t i s d i f f i c u l t to p r o p o r t i o n v a l u e s to d i f f e r e n t p a r t s of h a b i t a t as u l t i m a t e l y the salmon depend on them a l l to complete t h e i r l i f e c y c l e . However, t h i s d i s c u s s i o n suggests t h a t i n f u t u r e e x e r c i s e s , environmental c o n s t r a i n t s i n the whole catchment above a spawning ground should be examined when comparing salmon and timber v a l u e s . i v ) S u b j e c t i v e p r o b a b i l i t i e s Another major problem f o r a n a l y s i s i s t h a t q u a n t i t a t i v e e f f e c t s o f d i f f e r e n t h a r v e s t i n g p r e s c r i p t i o n s on the stream environment and i n t u r n on the success r a t e i n spawning and i n c u b a t i o n , are not known. Pers o n a l s u b j e c t i v e p r o b a b i l i t y e s t i m a t e s are a s s i g n e d to r e d u c t i o n s i n the h a r v e s t a b l e salmon p o p u l a t i o n , caused by damage to the spawning h a b i t a t , f o r each of the h a r v e s t i n g p r e s c r i p t i o n s (Sadler, 1970 and G i l l i c k and S c o t t , 1975). The r e s u l t i n g p r o b a b i l i t y m a t r i x i s shown i n Table 17. Table 17 P r o b a b i l i t y M a t r i x f o r Reduction i n 'Salmon Catch H a r v e s t i n g % r e d u c t i o n i n c a t c h Expected value p r e s c r x p t i o n no 1 Q 2 0 4 0 6 0 8 0 (% r e d u c t i o n harm i n catch) - Reserve 50 25 15 10 9*5 - S e l e c t i o n c u t t i n g 40 30 20 10 11 or s m a l l cut b l o c k s (40m b u f f e r s t r i p ) 10 20 40 - P r o g r e s s i v e c l e a r c u t 10 20 25 25 10 10 to stream edge 31 1 0 9 The percentage r e d u c t i o n i n c a t c h i s d e f i n e d as the decrease i n c a t c h four years a f t e r i n c u b a t i o n , compared t o t h a t expected under c o n d i t i o n s o f no damage from l o g g i n g to the spawning h a b i t a t . The category of 1 0 0 % r e d u c t i o n i n c a t c h i s not i n c l u d e d , as there i s no evidence t h a t salmon have been e l i m i n a t e d from a stream by l o g g i n g a c t i v i t y alone. The percentages i n the body of Table 17 are the s u b j e c t i v e p r o b a b i l i t i e s f o r each category of percentage r e d u c t i o n i n c a t c h . They sum to 10 0% f o r each h a r v e s t i n g p r e s c r i p t i o n , e.g. f o r the r e s e r v e there i s a 5 0 % chance of no r e d u c t i o n i n c a t c h and 2 5 % , 15% and 10% chance of 1 0 % , 20% and 40% r e d u c t i o n i n c a t c h r e s p e c t i v e l y . The expected v a l u e o f c a t c h r e d u c t i o n r e s u l t s from summing the c a t e g o r i e s of percentage r e d u c t i o n i n c a t c h weighted by the s u b j e c t i v e p r o b a b i l i t i e s . The l i t e r a t u r e agrees t h a t l o g g i n g impacts on f i s h p o p u l a t i o n s d i m i n i s h over time a f t e r completion of timber h a r v e s t i n g (McMynn, 1 9 7 0 and Crow, e_t al_. , 1 9 7 6 ) . The r a t e of decrease i n impact i s dependent on s i t e s p e c i f i c c o n d i t i o n s . Some s t u d i e s have assumed a constant impact f o r s e v e r a l years which then ends a b r u p t l y (Sadler, 19 70 and G i l l i c k and S c o t t , 1 9 7 5 ) . Here i t i s assumed t h a t the d e t r i m e n t a l e f f e c t s l a s t f o r t h r e e years a f t e r l o g g i n g . Present v a l u e s of salmon c o s t s are c a l c u l a t e d f o r a constant l e v e l of impact f o r those three years (Table 1 9 ) and f o r a d i m i n i s h i n g l e v e l of impact (Table 1 8 ) . In the l a t t e r the impact on salmon p o p u l a t i o n s (reduced catch) i s assumed to decrease by a t h i r d each year to zero three years 110 a f t e r l o g g i n g . V) Salmon v a l u e s Commercial Values. The 1976 landed value was approximately $2*028/kg. The average s i z e of sockeye caught i s approximately 2*72 kg. The o v e r - c a p i t a l i s e d s t r u c t u r e o f the salmon f i s h i n g i n d u s t r y ( C r u t c h f i e l d and Pontecorvo, 19 69) i m p l i e s t h a t f o r small changes i n the c a t c h o n l y the v a r i a b l e c a t c h i n g c o s t s can be c o n s i d e r e d . The high c a p i t a l c o s t s of v e s s e l s and equipment do not change wi t h s m a l l changes i n c a t c h . For 1976, v a r i a b l e c o s t s were 5 cents per f i s h f o r n e t t i n g and 9 c e n t s / f i s h f o r t r a w l i n g (Federal F i s h e r i e s S e r v i c e , 1978). A f i g u r e o f 6 c e n t s / f i s h or 2*2 cents/kg i s used here r e s u l t i n g i n a net landed value o f $2*0 06/kg. The commercial v a l u e of the Seymour sockeye run i s estimated as f o l l o w s : Good year 175,000 x 2*006 x 2*72 = $955,500 Poor year 25,000 x 2*006 x 2*72 = $136,500 ( s l i g h t rounding e r r o r s are due to change from i m p e r i a l measure to m e t r i c ) . Native Indian Food F i s h e r y v a l u e s . These f i s h are valued as c o s t of replacement from a commercial source ( B r i t i s h Columbia F i s h and W i l d l i f e Branch, 1977). Good year 3,000 x 2*006 x 2*72 = $16,380 Poor year 1,000 x 2*006 x 2*72 = $ 5,460 R e c r e a t i o n a l v a l u e s . F e d e r a l F i s h e r i e s i n Vancouver estimate fisherman day valu e s a t $15 f o r sea caught salmon and $25 f o r the f r e s h water s p o r t s f i s h ; chinook and s t e e l h e a d . They have equated the $15/day f i g u r e w i t h $ 1 7 / f i s h caught. No 111 such t r a n s f o r m a t i o n i s c u r r e n t l y a v a i l a b l e f o r the f r e s h water f i g u r e . For s i m p l i c i t y $17/fish i s used here. R e c r e a t i o n a l f i s h v a l u e s 3,750 x 17 = $63,750/year v i ) Four year c y c l e Table 16 c l e a r l y i l l u s t r a t e s the f o u r year c y c l e of two poor years and two good years d i s p l a y e d by the Seymour sockeye. T h i s immediately suggests p o s s i b l e b e n e f i t s i f timber h a r v e s t i n g o p e r a t i o n s were scheduled to c o i n c i d e w i t h the poor spawning y e a r s . P e r i o d s o f g r e a t e s t p o t e n t i a l harm to the spawning ground would then occur when the s m a l l e s t number of salmon are s u s c e p t i b l e to such harm. To examine t h i s p o t e n t i a l , the p r e s e n t v a l u e of salmon v a l u e s was c a l c u l a t e d f o r a timber h a r v e s t i n g schedule o f f o u r years between i n i t i a l l o g g i n g , i n each of the three zones o f the c o n s t r a i n t area and with 12 and 24 year leave p e r i o d s between passes. I t was assumed t h a t the f i r s t year of l o g g i n g i s the f i r s t poor spawning year i n the f o u r year c y c l e and t h a t salmon val u e s four years l a t e r are damaged (ma j o r i t y o f f i s h caught are f o u r - y e a r o l d ) . D i f f e r e n c e s i n p r e s e n t v a l u e s of timber c o s t s r e s u l t i n g from the h a r v e s t schedule used ( f i v e years s e p a r a t i n g l o g g i n g i n each zone and 15 or 25 year leave periods) and the h a r v e s t i n g schedule a p p r o p r i a t e t o the salmon c y c l e (four years s e p a r a t i n g l o g g i n g i n each zone and 12 or 2 4 year l e a v e periods) are s m a l l and w e l l w i t h i n p o t e n t i a l e r r o r s due to i n f o r m a t i o n inadequacies. For example the d i f f e r e n c e i n p r e s e n t v a l u e timber c o s t s f o r management a l t e r n a t i v e c (comparing a 24 and 112 a 25 year leave period) i s l e s s than $ 3 , 0 0 0 . In the d i s c u s s i o n the s l i g h t l y d i f f e r e n t timber h a r v e s t schedules are t r e a t e d as e q u i v a l e n t . v i i ) R e s u l t s - Present v a l u e s of salmon c o s t s (at 10%) R e s u l t s are presented f o r the assumption of d i m i n i s h i n g damage to salmon p o p u l a t i o n s f o r three years a f t e r l o g g i n g i n Table 18 and f o r no decrease u n t i l the three years are up i n Table 1 9 . Table 18 Present Values o f Salmon Costs f o r Timber H a r v e s t i n g P r e s c r i p t i o n s (Diminishing Harm to Salmon f o r Three Years a f t e r Logging Timber Discount r a t e i s 10% h a r v e s t i n g % r e d u c t i o n i n c a t c h p r e s c r i p t i o n 9 » 5 11 31 100 4 years between zones A. 12 yr leave p e r i o d $ 1 1 2 , 8 2 3 $ 1 3 0 , 6 3 7 $ 3 6 8 , 1 5 8 $ 1 , 1 8 7 , 6 0 7 B. 24 y r leave p e r i o d 9 4 , 2 4 5 1 0 9 , 1 2 6 3 0 7 , 5 3 7 9 9 2 , 0 5 5 5 years between zones C. 25 y r leave p e r i o d 1 4 3 , 8 9 5 1 6 6 , 6 1 5 4 6 9 , 5 5 2 1 , 5 1 4 , 6 8 3 F i r s t pass of a l l zones i n f i r s t 2 y r s D. 24 y r leave p e r i o d 8 7 , 4 1 4 1 0 1 , 2 1 6 2 8 5 , 2 4 6 9 2 0 , 1 4 8 The zones r e f e r to the three s e c t i o n s of the Seymour R i v e r as d e f i n e d i n the h a r v e s t i n g schedules. The f i g u r e s o f percentage r e d u c t i o n i n c a t c h are d e r i v e d from the expected v a l u e s (% r e d u c t i o n i n catch) i n Table 1 7 . The p r e s e n t v a l u e s o f salmon c o s t s are the r e d u c t i o n s i n 113 salmon c a t c h v a l u e s (from a s i t u a t i o n o f no l o g g i n g d i s t u r b a n c e ) , d i s c o u n t e d to the present a t 10%. The c a p i t a l l e t t e r s A to D are used f o r r e f e r e n c e to the management p r e s c r i p t i o n s i n the f o l l o w i n g d i s c u s s i o n . The same comments a l s o apply t o Table 19. Tabl e 19 Present Values of Salmon Costs f o r Timber H a r v e s t i n g P r e s c r i p t i o n s (No Decrease i n Harm to Salmon f o r Three Years a f t e r Logging) Timber Discount r a t e i s 10% h a r v e s t i n g % r e d u c t i o n i n c a t c h p r e s c r i p t i o n 9»5 11 31 100 4 years between zones A. 12 y r leave p e r i o d $226,710 $262,506 $739,790 $2,386,420 B. 24 y r leav e p e r i o d 191,827 222,116 625,963 2,019,236 5 years between zones C. 25 y r leave p e r i o d 238,383 276,023 777,882 2,509,298 F i r s t pass of a l l zones i n f i r s t 2 y r s D. 24 y r leav e p e r i o d 144,871 167,746 472,737 1,524,957 See F i g u r e 3 f o r p r o f i l e s o f r e d u c t i o n i n salmon v a l u e s f o r the f i r s t l o g g i n g pass. v i i i ) D i s c u s s i o n of r e s u l t s Commercial v a l u e s . The landed v a l u e of sockeye salmon has i n c r e a s e d r a p i d l y over r e c e n t y e a r s . P r i c e trends are impor-t a n t because a l a r g e p a r t of the prese n t v a l u e i s d i r e c t l y r e l a t e d t o the commercial v a l u e . R e c r e a t i o n a l v a l u e . T h i s measure i s a p o t e n t i a l source of s u b s t a n t i a l e r r o r i n the prese n t v a l u e c a l c u l a t i o n as th e r e i s 114 F I G U R E 2 I L L U S T R A T I O N OF THE IMPORTANCE OF ASSUMPTIONS ON THE IMPACT OF LOGGING A C T I V I T Y ON SALMON V A L U E S R e d u c t i o n i n s a l m o n v a l u e s G o o d a n d p o o r y e a r s r e f e r t o s p a w n i n g y e a r s D u r a t i o n o f i m p a c t o n s a l m o n v a l u e s (management p r e s c r i p t i o n s A , B — T a b l e 19) G o o d y e a r R e l a t i v e r e d u c t i o n i n s a l m o n • v a l u e s P o o r y e a r 3 y e a r s 2 y e a r s 4 y e a r s G o o d y e a r 2 4 6 8 2 4 6 8 2 4 6 8 Y e a r s ( l o g g i n g o c c u r s i n y e a r 1) I m p a c t o n n u m b e r o f s a l m o n c a u g h t r e d u c e d b y o n e t h i r d o f t o t a l e a c h y e a r (management a l t e r n a t i v e s A , B — T a b l e 1 C o m p a r e w i t h 3 y e a r s a b o v e R e l a t i v e r e d u c t i o n i n s a l m o n v a l u e s Y e a r s ( l o g g i n g a c t i v i t y o c c u r s i n y e a r 1) F I G U R E 3 P R O F I L E S OF REDUCTION I N SALMON V A L U E S FOR F I R S T LOGGING P A S S R e d u c t i o n i n s a l m o n v a l u e s A , B , C , D r e f e r t o m a n a g e m e n t p r e s c r i p t i o n s i n T a b l e 19 G o o d a n d p o o r y e a r s r e f e r t o s p a w n i n g y e a r s G o o d y e a r R e l a t i v e r e d u c t i o n i n s a l m o n v a l u e s P o o r y e a r Z o n e s l o g g e d 5 y e a r s a p a r t A a n d B Z o n e s l o g g e d 4 y e a r s a p a r t 6 8 10 12 14 16 4 6 8 10 12 14 Y e a r s a f t e r f i r s t l o g g i n g a c t i v i t y Good* y e a r R e l a t i v e r e d u c t i o n i n s a l m o n v a l u e s P o o r y e a r D H a r v e s t i n g a l l t h r e e z o n e s i n f i r s t t w o y e a r s P r o g r e s s i v e s e l e c t i o n c u t t i n g o p e r a t i o n i n f i r s t t h r e e y e a r s ( o n l y o n e l o g g i n g p a s s ) 8 10 Y e a r s a f t e r f i r s t l o g g i n g a c t i v i t y 116 an almost complete l a c k of i n f o r m a t i o n on the number and s p e c i e s of f i s h caught from the Seymour spawning ground. I t i s q u i t e l i k e l y t h a t r e c r e a t i o n a l v a l u e s are h i g h e r than allowed f o r . Doubling the r e c r e a t i o n a l f i s h v a l u e i n c r e a s e s the p r e s e n t v a l u e s i n Table 18 by 12% f o r C ( f i v e years between zones, 25 year leave p e r i o d ) , 15% f o r D ( f i r s t pass of a l l zones i n f i r s t two y e a r s , 24 year leave p e r i o d ) , and 20% f o r A and B (both f o u r years between zones, A-12 year leave p e r i o d , B-24 year leave p e r i o d ) . In T a b l e 19 10% i s added to C, 11%.to D, and 14% to A and B. The assumptions of the three year r e c o v e r y p e r i o d , the s t r a i g h t l i n e r e l a t i o n s h i p of d e c r e a s i n g damage to the spawning ground over those three y e a r s , and the s u b j e c t i v e p r o b a b i l i t y estimates of percentage r e d u c t i o n i n f i s h caught a l l l a c k e m p i r i c a l backing. T h i s r e s u l t s from inadequate knowledge of the e f f e c t s of l o g g i n g on a salmon spawning ground and i n p a r t i c u l a r the l a c k of case s t u d i e s and the i n a b i l i t y to q u a n t i t a t i v e l y account f o r s i t e s p e c i f i c d i f f e r e n c e s . Loss of f i s h v a l u e s i s very s e n s i t i v e to these assumptions. Changes to the l e n g t h of the r e c o v e r y p e r i o d (assumed to be three years) are p a r t i c u l a r l y important to A and B i n Tables 18 and 19 as r e d u c t i o n to two years r e s u l t s i n no "good" salmon years being a f f e c t e d w h i l e i n c r e a s i n g t o f o u r years adds o n l y good years to those t h a t are a d v e r s e l y a f f e c t e d (Figure 2). The weight of the assumption o f d e c r e a s i n g damage to the spawning ground over three years i s apparent from a comparison of Tables 18 and 19. Again i t i s A and B which a f f e c t good salmon years o n l y i n the t h i r d year a f t e r each o p e r a t i o n (when 117 damage i s l e a s t i n Table 18), i n the c o n s t r a i n t a r e a , t h a t are most s e n s i t i v e to t h i s assumption (Figure 2). The s e n s i t i v i t y of r e s u l t s to the s u b j e c t i v e p r o b a b i l i t y estimates i s a l s o shown by Tables 18 and 19. For management a l t e r n a t i v e A, a one per cent change i n f i s h c a t c h r e p r e s e n t s a p r e s e n t value of $12,000 i n Table 18 or $24,000 i n Table 19. I n t e r e s t r a t e . The p r e s e n t v a l u e c o s t s are very s e n s i t i v e to i n t e r e s t r a t e . Higher present v a l u e s correspond to lower i n t e r e s t r a t e s , e.g. f o r management a l t e r n a t i v e B the present values of salmon c o s t s are almost doubled w i t h a d i s c o u n t r a t e o f 5% i n s t e a d of 10% ( f o r T a b l e 18 the p r e s e n t v a l u e of 100% r e d u c t i o n i n c a t c h a t 10% i s $992,055; at 5% i t i s $1,742,985). Impact of other h a b i t a l f a c t o r s . Table 16 shows a s u b s t a n t i a l v a r i a t i o n i n spawning p o p u l a t i o n and i n commercial c a t c h , even w i t h i n good years and w i t h i n poor y e a r s . For the four good years r e p r e s e n t e d the commercial c a t c h v a r i e d from 114,000 to 220,000 f i s h and i n the three poor years from 18,000 to 35,000. T h i s u n d e r l i n e s the major problem of measuring the impact of one p a r t of the environment on the f i s h p o p u l a t i o n independently of the environment o f the whole l i f e c y c l e . 9. D i s c u s s i o n of Economic E f f i c i e n c y of Resource A l l o c a t i o n  - Salmon and Timber Values F o r e s t Reserve Review of the l i t e r a t u r e i n d i c a t e s o n l y minor b e n e f i t s i n reduced water r u n o f f and reduced o v e r l a n d flow o f d e b r i s from wide as compared to narrow r i p a r i a n f o r e s t r e s e r v e s . 118 The d i f f e r e n c e i n the present value o f foregone timber v a l u e s between the r e s e r v e ( a l t e r n a t i v e a) and the s e l e c t i o n c u t t i n g a l t e r n a t i v e s (c) i s between $115,000 and $200,000. T h i s r e p r e s e n t s from 10 to 17% of the t o t a l salmon prese n t v a l u e s exposed to h a r v e s t i n g o p e r a t i o n s , scheduled a c c o r d i n g to the salmon fo u r year c y c l e i n Table 18 (A,B,D) and between 5 and 8% of those i n Table 19. From Table 17 the d i f f e r e n c e i n expected v a l u e o f r e d u c t i o n i n salmon c a t c h between the 20 c h a i n wide r e s e r v e and the s e l e c t i o n o p t i o n s i s o n l y 1.1/2 per cent. Under the assumptions used the r e s e r v e i s a r e l a t i v e l y i n e f f i c i e n t management s t r a t e g y f o r the combined timber and salmon v a l u e s . S e l e c t i o n and Small Cut Block Options Management a l t e r n a t i v e s c ( i n t e r p r e t a t i o n of the c u r r e n t c o n s t r a i n t p o s i t i o n from the re s o u r c e f o l i o - - s e e s e c t i o n 5, Management A l t e r n a t i v e s ) are the most a t t r a c t i v e . Present v a l u e s of foregone timber values range from $114,00 0 to $166,000 (see s e c t i o n 7.h, Summary of foregone timber v a l u e s ) . The hig h e r f i g u r e o f $166,000 i s w e l l w i t h i n the d i f f e r e n c e of presen t v a l u e salmon c o s t s between the c a t e g o r i e s of 11% ( s e l e c t i o n logging) and 31% ( p r o g r e s s i v e c l e a r c u t t o the stream bank) r e d u c t i o n i n c a t c h . In Table 18 the s m a l l e s t d i f f e r e n c e between these two c l a s s e s i s $184,000 f o r a l t e r n a -t i v e D. The percentage f i g u r e s (11% and 31%) are obtained from the s u b j e c t i v e p r o b a b i l i t i e s a s s i g n e d i n Table 17. The s e l e c t i o n o p t i o n s are economically more e f f i c i e n t than c l e a r -c u t t i n g . I f the d i f f e r e n c e between the two was o n l y 10% 119 r e d u c t i o n i n c a t c h i n s t e a d o f the 20% assumed, the r e s u l t s would be very comparable (see Table 18). E x t e n s i o n of the q u a l i t y s e l e c t i o n p r e s c r i p t i o n t o the remainder o f the c o n s t r a i n t area w i l l decrease the foregone timber v a l u e s even more. C o n s i d e r i n g the sm a l l number o f a l t e r n a t i v e s s t u d i e d t h i s may appear to be the f i n a l answer. However, s e n s i t i v i t y a n a l y s i s can provide f u r t h e r f i n e t u n i n g . S e v e r a l examples are d e s c r i b e d here. F i r s t l y , s u b s t a n t i a l savings are l i k e l y i f timber h a r v e s t -i n g i s co n c e n t r a t e d i n the poor spawning years (Figure 3). In Table 18 the d i f f e r e n c e i n pr e s e n t v a l u e s between B (four years between zones—24 year leave p e r i o d — h a r v e s t i n g c o n c e n t r a t e d i n poor spawning years) and C ( f i v e years between zones—25 year leave period) i s $57,000 a t a l e v e l o f 11% r e d u c t i o n i n c a t c h ( s u b j e c t i v e p r o b a b i l i t y assigned to s e l e c t i o n l o g g i n g a l t e r n a -t i v e s (see Table 17). The d i f f e r e n c e i n timber v a l u e s i s n e g l i g i b l e (see s e c t i o n 8.b.vi, Four year c y c l e ) . Decreasing the l e n g t h o f the leave p e r i o d from 25 t o 15 or from 2 4 to 12 years decreases the timber c o s t s through r e d u c t i o n i n the o p p o r t u n i t y c o s t s o f r o a d i n g and an i n c r e a s e i n the s e l e c t i o n b e n e f i t s from a s h o r t e r d i s c o u n t i n g p e r i o d . The salmon c o s t s i n c r e a s e s u b s t a n t i a l l y . A $15,000 savings i n timber v a l u e s i s more than balanced by a $21,000 l o s s i n salmon v a l u e s (A-B or $ 130 ,000-$109 ,000 , Table 18). T h i s suggested change i s not e f f i c i e n t f o r the combined timber and salmon v a l u e s . Rather than pursue an optimum leave p e r i o d f o r both r e s o u r c e s other q u e s t i o n s r e q u i r e answering. 120 Is i t b e n e f i c i a l to h a r v e s t the f i r s t pass of the c o n s t r a i n t area c o n c u r r e n t l y with road c o n s t r u c t i o n to the n o r t h end o f the Seymour R i v e r , d u r i n g the f i r s t two years o f o p e r a t i o n s ( F i s h and W i l d l i f e constraint)? From the summary of foregone timber v a l u e s and Table 18, the savings i n timber v a l u e s w i t h a 25 year leave p e r i o d i s $26,000 and t h a t i n salmon val u e s ( d i f f e r e n c e being B and D a t 11 % r e d u c t i o n i n catch) i s $8,000. The a c c e l e r a t e d r o a d i n g program may t h e r e -f o r e cause up to 3*7% a d d i t i o n a l l o s s in. . salmon v a l u e s b e f o r e i t becomes l e s s a t t r a c t i v e (see Table 18, $34,000 -r $920,000). I f Table 19 i s used the margin i s 5*3%(26,000 + 55,000 f 1,525,000) and when r e c a l c u l a t e d f o r a 12 year leave p e r i o d (Table 18) the margin i s 4*7%. The a n a l y s i s may be f u r t h e r extended t o examine the b e n e f i t s and c o s t s of a p r o g r e s s i v e s e l e c t i o n compared to a pass system. I f the c o n s t r a i n t area was p r o g r e s s i v e l y s e l e c t i o n harvested over the f i r s t t h ree y e a r s , p r e s e n t value timber b e n e f i t s are estimated a t approximately $200,000. T h i s i s compared to l o g g i n g the f i r s t pass w i t h road c o n s t r u c t i o n i n the f i r s t two y e a r s ' o p e r a t i o n s ( a l t e r n a t i v e D, Table 18) f o l l o w e d by a 25 year leave p e r i o d before the second pass. Roading and s e l e c t i o n b e n e f i t s c o n t r i b u t e to t h i s p o t e n t i a l s a v i n g . Under the assumption o f d i m i n i s h i n g harm to salmon p o p u l a t i o n s over the t h r e e years a f t e r l o g g i n g , the p r e s e n t v a l u e o f the salmon c o s t s , a t 11% r e d u c t i o n i n c a t c h , i n c r e a s e s by $35,000. The net f i g u r e of $165,000 prese n t value i s e q u i -v a l e n t to 13*5% r e d u c t i o n i n c a t c h . C o n c e n t r a t i o n of 121 h a r v e s t i n g a c t i v i t y i n a p r o g r e s s i v e s e l e c t i o n o p e r a t i o n , may t h e r e f o r e f u r t h e r reduce salmon p o p u l a t i o n v a l u e s , i n the years a f f e c t e d by l o g g i n g a c t i v i t y by up to 13»5%, before r e l a t i v e b e n e f i t s are no longer a v a i l a b l e . With the assumption of no r e d u c t i o n i n harm to the salmon p o p u l a t i o n s over the three years (Table 19) the r e d u c t i o n i n salmon p r e s e n t v a l u e s i s s m a l l and the net f i g u r e o f c l o s e to $200,000 i s again e q u i v a l e n t to 13*5% harm to the salmon p o p u l a t i o n s . V a r i a t i o n i n d u r a t i o n of adverse impacts on the salmon h a b i t a t has not been allowed f o r , although i t i s another dimension t h a t may r e a d i l y be i n c l u d e d i n a n a l y s i s such as t h i s . TO. Q u a l i t a t i v e Comments on Other Resource Values The e f f e c t of the v a r i o u s management a l t e r n a t i v e s on the v i s u a l impact component of r e c r e a t i o n i s d i f f i c u l t to measure because of i n a b i l i t y to aggregate p e r s o n a l m a r g i n a l u t i l i t i e s . G e n e r a l l y , s e l e c t i o n l o g g i n g l e a v i n g 50% of the Crown cover i s p r e f e r r e d to c l e a r c u t t i n g . Water q u a l i t y of the Seymour R i v e r may have some impact on v a l u a t i o n o f r e c r e a t i o n a l developments near the r i v e r mouth and on the h a b i t a t and p r o d u c t i v i t y of sockeye f r y and other f i s h i n Seymour Arm of Shuswap Lake. Increased sediment content depends l a r g e l y on r o a d i n g . A c c e l e r a t e d - d i s p e r s e d r o a d i n g programs w i l l tend to i n c r e a s e sedimentation over s h o r t p e r i o d s while ,a s m a l l s i z e d h a r v e s t i n g o p e r a t i o n spread through time w i l l tend t o continue contamination a t lower l e v e l s f o r longer d u r a t i o n . 122 No evidence i s c u r r e n t l y a v a i l a b l e to suggest t h a t these e f f e c t s w i l l be s i g n i f i c a n t . TT. S o c i a l Impacts Employment and income e f f e c t s are of i n t e r e s t here. Reduction i n a l l o w a b l e cut i s p o t e n t i a l l y the most impor-t a n t of the timber c o s t f a c t o r s . Without d e t a i l e d i n f o r m a t i o n on the timber supply and the s t r u c t u r e o f the l o c a l i n d u s t r y , a r i g o r o u s a n a l y s i s i s not p o s s i b l e . The l i n k s between o p e r a t i o n a l p l a n n i n g and t h a t a t a r e g i o n a l l e v e l are important here. The l o s s o f a v a i l a b l e volume due to c o n s t r a i n t s i n the Seymour Resource F o l i o may c o n t r i b u t e to the c l o s i n g o f a s h i f t or of an e n t i r e sawmill o p e r a t i o n . The r e g i o n a l p l a n n e r ' s job i n t h i s s i t u a t i o n i s t o compare b e n e f i t s and c o s t s o f con-s t r a i n t s a t the r e g i o n a l l e v e l , based on i n f o r m a t i o n from the o p e r a t i o n a l l e v e l , such as obtained i n t h i s a n a l y s i s . I t i s estimated t h a t the 4 00 m wide r e s e r v e ( a l t e r n a t i v e a) along the Seymour R i v e r would d i r e c t l y c o s t f o u r l o c a l jobs ( l o g g i n g and sawmilling) or $72,000 i n annual l o c a l income a t an annual wage of $18,000. The c u r r e n t c o n s t r a i n t wording ( a l t e r n a t i v e c) would be r e s p o n s i b l e f o r o n l y one d i r e c t work p o s i t i o n . The other timber c o s t f a c t o r s would have n e g l i g i b l e s o c i a l impact. A d d i t i o n a l r o a d i n g requirements may c o n t r i b u t e to employment o f e x t r a personnel f o r a s h o r t p e r i o d . D i r e c t i o n a l f a l l i n g and s e l e c t i o n l o g g i n g imply some r e d u c t i o n i n labour p r o d u c t i v i t y , although i n the former there may be i n c r e a s e d v a l u e due to l e s s breakage, and i n the l a t t e r improved produc-t i v i t y per u n i t o f firmwood i s l i k e l y . 123 I f environmental c o n s t r a i n t s do not i n v o l v e a r e d u c t i o n i n a l l o w a b l e c u t and i f on a r e l a t i v e l y s m a l l s c a l e (as i n the c o n s t r a i n t a r e a ) , the d i r e c t s o c i a l impact of changes i n salmon va l u e s i s l i k e l y to be g r e a t e r than t h a t of corresponding f o r e -gone timber v a l u e s . Aggregation of c o n s t r a i n t e f f e c t s f o r the whole salmon h a b i t a t i n c l u d i n g spawning ground, l a k e , m i g r a t o r y r o u t e , e s t u a r y and sea may w e l l r e v e r s e t h i s statement. The d i f f e r e n c e between management a l t e r n a t i v e s a and c i n a l l o w a b l e c u t d i r e c t employment e f f e c t s i s ,3 jobs or $54,000 i n annual l o c a l employee income. For sockeye salmon (both commercial and N a t i v e I n d i a n s u b s i s t e n c e ) , the net landed v a l u e of $2«006/kg or $5.46 per f i s h and the p r o c e s s i n g c o s t of $2»50 per f i s h (1976 f i g u r e s from F e d e r a l F i s h e r i e s ) , g i v e s a rounded t o t a l of $8 per f i s h a t t r i b u t a b l e t o d i r e c t income from the salmon r e s o u r c e . In an average poor year the sum o f $54,000 corresponds to 26% o f the c a t c h w h i l e i n a good year i t r e p r e s e n t s 4% o f the c a t c h . A v a i l a b l e evidence does not suggest t h a t t h i s magnitude o f p r o t e c t i o n i s p r o v i d e d by management a l t e r n a t i v e a as compared to c. In the example a d i f f e r e n c e of o n l y 1.1/2% was used. However, i t must be remembered t h a t impacts on the salmon p o p u l a t i o n are l i k e l y to be temporary and t h a t changes i n timber o p e r a t i o n s occur d i s c r e t e l y , o f t e n depending on accumulated supply changes over a number of areas. For s i m p l i c i t y of i l l u s t r a t i o n i t has been assumed t h a t i n d i r e c t and induced employment m u l t i p l i e r s are the same f o r both i n d u s t r i e s . A l s o o f i n t e r e s t i s the g e o g r a p h i c a l d i s t r i b u t i o n o f income e f f e c t s . Impacts on the timber i n d u s t r y are u s u a l l y f e l t i n 124 the resource l o c a l i t y . By c o n t r a s t most o f the salmon are caught i n the lower mainland. Information i s not a v a i l a b l e f o r a t t r i b u t i n g income e f f e c t s to changes i n r e c r e a t i o n a l v a l u e s . In t h i s r e g a r d , the moose herd, which i s r e l a t i v e l y s m a l l , i s unimportant. The s i z e and geographic d i s t r i b u t i o n of r e c r e a t i o n a l f i s h i n g which emanates from the Seymour R i v e r i s u n c e r t a i n . Seymour salmon probably p r o v i d e r e c r e a t i o n a l v a l u e s i n Shuswap Lake, the m i g r a t o r y r o u t e a l o n g the Thompson and F r a s e r R i v e r s and a t sea, adding incremently to incomes i n a l l areas. 12. C o n c l u s i o n a) The main resource v a l u e s s u s c e p t i b l e to damage from l o g g i n g a c t i v i t y are the important sockeye salmon spawning ground i n the Seymour R i v e r to the south of the f o l i o area and the moose environment i n the swampy areas adjacent .to the r i v e r . b) The r e s u l t s suggest - the f o l l o w i n g h a r v e s t i n g s t r a t e g y and r e s t r i c t i o n s f o r the c o n s t r a i n t area. I t i s a p p r e c i a t e d t h a t t h i s study i s a p a r t i a l a n a l y s i s and t h a t c o n d i t i o n s beyond the boundaries of the study area may take precedence because o f g r e a t e r s i g n i f i c a n c e . However, these p o i n t s do i n d i c a t e d i r e c t i o n s i n which s o c i a l b e n e f i t s are estimated to occur. i ) Timber h a r v e s t i n g and r o a d i n g should be scheduled to occur as much as p o s s i b l e i n poor spawning y e a r s . The next two poor years are i n 1980 and 1981. ' i i ) A p r o g r e s s i v e q u a l i t y s e l e c t i o n o p e r a t i o n f o r timber h a r v e s t i n g s i g n i f i c a n t l y reduces i n t e r e s t charges on r o a d i n g . The r e s u l t i n g economies i n l o g g i n g and m i l l i n g on a firmwood 125 b a s i s outweigh the c o s t o f reduced timber supply. R e t e n t i o n of around 50% of the crown cover r e t a i n s s h e l t e r f o r moose and reduces s o i l d i s t u r b a n c e and r u n o f f compared to a c l e a r c u t , and maintains a b a r r i e r a g a i n s t o v e r l a n d d e b r i s flow. i i i ) H a r v e s t i n g should occur w i t h r o a d i n g where p r a c t i c a l . T h i s i s to cover the F i s h and W i l d l i f e requirement o f e a r l y road access t o the n o r t h end of the r i v e r and i s aimed a t keeping i n t e r e s t charges on roading to a minimum. i v ) A 40 m b u f f e r s t r i p a d j a c e n t t o the r i v e r and swamp meadows, d i r e c t i o n a l f a l l i n g away from the r i v e r and the r e t e n t i o n o f shade t r e e s c l o s e to the water are recommended. Costs o f a b u f f e r s t r i p and d i r e c t i o n a l f a l l i n g appear r e l a t i v e l y s m a l l . Temperature e f f e c t s of shade t r e e s are maintained. P o s s i b l e t e r r e s t i a l food sources from streamside v e g e t a t i o n f o r l o c a l rainbow t r o u t remain. Source o f sedimen-t a t i o n from bank c o l l a p s e i s kept t o a minimum. v) C a r e f u l a t t e n t i o n . s h o u l d be p a i d to road l o c a t i o n and to the use o f p r o t e c t i v e methods i n c o n s t r u c t i o n . Sedimentation i s the l e a s t c o n t r o l l a b l e o f the f a c t o r s d e t r i m e n t a l to salmon h a b i t a t t h a t r e s u l t s from timber h a r v e s t i n g . v i ) Landings should be allowed i n the c o n s t r a i n t area and as with temporary roads they should be r i p p e d and grassed when l o g g i n g i s f i n i s h e d . v i i ) The c o n s t r a i n t o f winter l o g g i n g i s r e t a i n e d as the area appears s u i t a b l e and advantages of f r o z e n ground may be impor-t a n t on the wet s o i l s i n the southern h a l f o f the f o l i o area. Salmon are l e a s t v u l n e r a b l e a t t h i s time i n the Seymour R i v e r . 126 c) Summary of important v a r i a b l e s and assumptions. i ) Timber c o s t s of the environmental c o n s t r a i n t s are dominated by i n t e r e s t charges on r o a d i n g c o s t s . S e n s i t i v e c o s t elements i n c l u d e the l a y o u t or d e n s i t y of r o a d i n g , volume harvested per ha, r o a d i n g c o s t , the o p p o r t u n i t y r o a d i n g c o s t perm 3 of timber harvested, and the t i m i n g of h a r v e s t i n g . Com-p a r a t i v e r e s u l t s are not p a r t i c u l a r l y s e n s i t i v e to i n t e r e s t r a t e s c l o s e to 10%. Estimated b e n e f i t s from q u a l i t y s e l e c t i o n h a r v e s t i n g are important. They depend on assumptions of reduced decay i n harvested logs r e s u l t i n g i n lower h a r v e s t i n g and m i l l i n g c o s t s per c u n i t o f merchantable timber. I f timber i s a l i e n a t e d from h a r v e s t i n g , e f f e c t s on a l l o w a b l e cut can be s u b s t a n t i a l . However, the concept o f annual a l l o w a b l e cut spreads the c o s t through the r o t a t i o n , r e d u c i n g the s i g n i f i c a n c e o f t h i s c o s t i n p r e s e n t value terms i n compari-son to o t h e r c o s t items. With an assumption of f u l l timber commitment l o s s of l o c a l employment and income i s a p o t e n t i a l s o c i a l c o s t . i i ) Salmon v a l u e s . The l i t e r a t u r e suggests t h a t a wide r i v e r r e s e r v e s t r i p p r o v i d e s minimal p r o t e c t i o n b e n e f i t s a d d i t i o n a l to t h a t of a narrow s t r i p . Only a s m a l l p o r t i o n of the salmon h a b i t a t has been examined. S u b s t a n t i a l v a r i a t i o n i n the commercial c a t c h and i n the number of spawners occurs i n response to environmental i n f l u e n c e s i n other stages of the salmon l i f e c y c l e . R e c r e a t i o n a l importance o f the Seymour spawning ground i s unknown. S e n s i t i v i t y of r e s u l t s to t h i s f a c t o r i s shown by the i n c r e a s e of up to 20% i n c a l c u l a t e d salmon p r e s e n t values w i t h 127 a d o u b l i n g of r e c r e a t i o n a l v a l u e s . G r e a t e s t u n c e r t a i n t y and t h e r e f o r e p o t e n t i a l e r r o r concerns the r e l a t i o n s h i p s between d i f f e r e n t l o g g i n g p r e s c r i p t i o n s and salmon p o p u l a t i o n s i z e . F i g u r e s were assig n e d s u b j e c t i v e l y to the percentage r e d u c t i o n i n salmon c a t c h and to the d u r a t i o n and r a t e of decrease o f adverse environmental c o n d i t i o n s f o l l o w i n g l o g g i n g . The d i s c o u n t r a t e a f f e c t s t o t a l salmon valu e s more than timber v a l u e s , because of the r e l a t i v e l y l a r g e s i z e o f the former and because comparative r o a d i n g c o s t s are l e s s s e n s i t i v e to i n t e r e s t r a t e (roading c o s t s are o p p o r t u n i t y c o s t s — n o t an a l l o r n o t h i n g c o s t ) . Lower i n t e r e s t r a t e s emphasise the gains to be had from e a r l y p r o g r e s s i v e s e l e c t i o n ;-operations, scheduled a c c o r d i n g to the poor salmon spawning years and the r o a d i n g program. i i i ) Moose v a l u e s . The c o n s t r a i n t of q u a l i t y s e l e c t i o n l o g g i n g appears f a v o u r a b l e to the timber i n d u s t r y . Allowance i s a v a i l a b l e f o r s e l e c t i o n c u t t i n g of the M ± r e s e r v e areas. P o s s i b l e e f f e c t s o f roading t o the n o r t h end of the Seymour R i v e r i n the f i r s t two years on i n c r e a s e d sedimentation should be c o n s i d e r e d . 128 CHAPTER V I I I CONCLUSIONS AND RECOMMENDATIONS B i o l o g i c a l , p h y s i c a l and t e c h n i c a l v a r i a b l e s determine the amounts of the v a r i o u s f o r e s t r e source uses and the environmental q u a l i t y a v a i l a b l e f o r any giv e n f o r e s t management regime. They pro v i d e no i n d i c a t i o n o f s o c i a l p r e f e r e n c e s f o r a l t e r n a t i v e goods; a p r e r e q u i s i t e f o r the s e l e c t i o n o f plans t h a t y i e l d maximum s o c i a l w e l f a r e . T h i s g e n e r a l o b j e c t i v e i s o f t e n assumed to apply because of the dominant f o r e s t ownership p o s i t i o n o f the Crown. Economic a n a l y s i s , u s i n g monetary values as the common denominator o f consumer p r e f e r e n c e , p r e s e n t s a means f o r connecting p h y s i c a l measurements to the concept o f s o c i a l w e l f a r e . As was shown i n the e a r l i e r c h a p t e r s , t o date t h e r e has been very l i t t l e economic i n p u t i n f o r e s t r e s o u r c e p l a n n i n g , e i t h e r a t the r e g i o n a l (overview) l e v e l or a t the l o c a l o p e r a t i o n a l l e v e l . G u i d e l i n e s and l e g i s l a t i o n are s t i l l b e i n g i n t r o d u c e d w i t h minimal c o n s i d e r a t i o n o f t h e i r economic impact and o f t h e i r e f f e c t s on other r e s o u r c e s . The o b j e c t i v e of t h i s t h e s i s was.to d e r i v e a procedure f o r i n t r o d u c i n g economic a n a l y s i s i n t o f o r e s t r e s o u r s e p l a n n i n g a t the o p e r a t i o n a l l e v e l . An important c o r o l l a r y t o t h i s aim, i s the need f o r a method capable of o b t a i n i n g u s e f u l r e s u l t s w i t h i n the c o n s t r a i n t s o f c u r r e n t knowledge, budgets and manpower a v a i l a b i l i t y and the a p p l i c a b i l i t y of economic theory. Examination o f the economic theory o f resource a l l o c a t i o n , when a p p l i e d t o f o r e s t r e s o u r c e s , r e v e a l s major d e f i c i e n c i e s o f 129 market i m p e r f e c t i o n and inadequate knowledge. However, the a v a i l a b i l i t y of resources and h a r v e s t i n g i n f o r m a t i o n f o r timber o p e r a t i o n s ; the dominant resource use i n economic terms and i n v o l v e d i n most f o r e s t r esource use c o n f l i c t s , p r o v i d e s a good s t a r t i n g p o i n t f o r a n a l y s i s . I f i n f o r m a t i o n on the s m a l l number of other marketed f o r e s t uses and shadow-p r i c i n g techniques are added to t h i s base, a p r a c t i c a l procedure i s a v a i l a b l e . Although o f t e n unheeded, the s o c i a l i m p l i c a t i o n s of e n v i r o n -mental c o n s t r a i n t s can be s i g n i f i c a n t , p a r t i c u l a r l y a t the l o c a l l e v e l and i n aggregated form a t the r e g i o n a l l e v e l . Before s u i t a b l e c r i t e r i a (e.g. f o r income d i s t r i b u t i o n e f f e c t s ) can f u l l y c o n t r i b u t e t o the a n a l y s i s , a c l e a r l y d e f i n e d s e t of o b j e c t i v e s f o r use of f o r e s t r e s o u r c e s i s e s s e n t i a l . S e v e r a l simple c r i t e r i a have been d i s c u s s e d and i n d i c i e s estimated f o r t h e i r use. Questions of who pays or who b e n e f i t s , become i n c r e a s i n g l y important as more s t r i n g e n t c o n s t r a i n t s are imposed. In t h i s study, economic a n a l y s i s has been aimed a t the o p e r a t i o n a l l e v e l ; a t the l o c a l and d i s t r i c t o f f i c e s of the v a r i o u s resource agencies and companies, as the i n p u t of f i e l d e xperience and i n f o r m a t i o n i s important f o r producing good r e s u l t s . A l s o h i g h e r l e v e l s of p l a n n i n g depend on i n f o r m a t i o n from the o p e r a t i o n a l l e v e l . S i t e s p e c i f i c v a r i a t i o n makes aggregation d i f f i c u l t . Knowledge o f environmental c o n s t r a i n t c o s t s and b e n e f i t s f o r an i n c r e a s e d v a r i e t y of d i f f e r e n t s i t e c o n d i t i o n s p r o v i d e s g r e a t e r c o n f i d e n c e i n r e g i o n a l e s t i m a t e s . At the r e g i o n a l l e v e l an overview o f f o r e s t resource a l l o c a t i o n 130 i s a v a i l a b l e . T h i s i s important f o r d e t e r m i n a t i o n of the mag-nit u d e of impacts of p o s s i b l e management a l t e r n a t i v e s or p o l i c i e s . A l s o t h e r e i s f l e x i b i l i t y f o r s p a t i a l a l l o c a t i o n o f resource uses and v a l u e s a c c o r d i n g to l o c a l demand and supply f a c t o r s . The example o f Chapter VII shows t h a t c o n s i d e r a b l e b e n e f i t s may be a v a i l a b l e from economic a n a l y s i s . To undertake any a n a l y s i s i t i s necessary to examine the r e s o u r c e s i n c o n f l i c t and seek p e r t i n e n t b i o l o g i c a l and p h y s i c a l i n f o r m a t i o n . In Chapter VII i t was h e l p f u l to have estimates of the s i z e and v a r i a t i o n of the Sockeye Salmon spawning p o p u l a t i o n and to be aware of the pathways by which l o g g i n g may d e t r i m e n t a l l y a f f e c t salmon. Awareness of other p o s s i b l e s o l u t i o n s i s i n c r e a s e d , the r e l a t i v e importance o f the d i f f e r e n t r e source v a l u e s becomes apparent and i n g e n e r a l a b e t t e r understanding of the problem i s o b tained. Information d e f i c i e n c i e s r a r e l y a l l o w a p r e c i s e e s t i m a t i o n of timber v a l u e s , l e t alone other v a l u e s . However, a n a l y s i s does o f t e n p r o v i d e a f e e l i n g f o r the magnitude of r e s o u r c e v a l u e s and i t i d e n t i f i e s s e n s i t i v e v a r i a b l e s , areas of s e r i o u s data d e f i c i e n c i e s and where improvements i n data q u a l i t y and, t h e r e f o r e , r e s u l t s c o u l d be a v a i l a b l e a t r e l a t i v e l y low c o s t . Management a l t e r n a t i v e s p r o v i d i n g i n c r e a s e d o v e r a l l b e n e f i t s may be suggested. Economic a n a l y s i s i s not recommended f o r a l l f o r e s t r e s ource p l a n n i n g s i t u a t i o n s because of a c u r r e n t d e f i c i e n c y 1 31 i n s u i t a b l y t r a i n e d personnel and because i t i s not always warranted. I t i s recommended t h a t a n a l y s i s i s i n i t i a l l y used i n important resource c o n f l i c t s which l a c k " i n t u i t i v e " s o l u t i o n s . Once a r e s e r v o i r of experience and i n f o r m a t i o n has been b u i l t up more g e n e r a l a p p l i c a t i o n s become p r a c t i c a l . S i t u a t i o n s where economic a n a l y s i s i s not r e q u i r e d i n c l u d e those where there i s an absence of c o n f l i c t , where c o s t s are low from experience and where the c o n s t r a i n t i s t e c h n i c a l l y i n f e a s i b l e or i n t u i t i v e l y uneconomic (again depends on e x t r a p o l a t i o n o f experience gained i n other s i t u a t i o n s ) . In the l a t t e r , estimates of resource v a l u e s may be r e q u i r e d to s a t i s f y managers of p r o t e c t e d v a l u e s t h a t t h e i r recommended c o n s t r a i n t s are i m p r a c t i c a l . Improvement i n a v a i l a b l e data i s necessary to i n c r e a s e the u s e f u l n e s s of economic a n a l y s i s i n f o r e s t r e source p l a n n i n g . C u r r e n t l y a v a i l a b l e i n f o r m a t i o n i s d i s p e r s e d amongst d i f f e r e n t government agenci e s , companies and u n i v e r s i t i e s . C o l l a t i o n of t h i s i n f o r m a t i o n and p r o v i s i o n f o r feedback and updating o f the data base i s a p r e r e q u i s i t e o f a program o f a n a l y s i s . An understanding of the b i o l o g i c a l systems o f the d i f f e r e n t resource v a l u e s and t h e i r i n t e r a c t i o n s with the environment i s important. More environmental s t u d i e s should be encouraged. D e t a i l e d s t u d i e s of the f i s h environment i n t e r a c t i o n s are expensive, and i f c a r r i e d out i n o n l y a few watersheds, w i l l not be r e p r e s e n t a t i v e o f the whole area. Complementing these s t u d i e s 132 w i t h l e s s i n t e n s i v e examination of a d d i t i o n a l watersheds w i l l improve general knowledge and a b i l i t y t o a l l o w f o r s i t e s p e c i f i c c o n d i t i o n s . S t u d i e s a t C a r n a t i o n Creek on Vancouver I s l a n d and the S l i m Creek watershed near P r i n c e George are a s t a r t to o b t a i n i n g some o f t h i s i n f o r m a t i o n . A t t e n t i o n to a c c o u n t i n g procedures has much p o t e n t i a l f o r improved timber c o s t i n f o r m a t i o n f o r environmental c o n s t r a i n t s . A c o s t i n g system f o r roads has a l r e a d y been designed (Ottens, 1975). Once e s t a b l i s h e d , the c o s t s o f m a i n t a i n i n g a s u i t a b l e a c c o u n t i n g system would be minimal. The B.C.F.S. and o t h e r r e s o u r c e agencies w i l l remain a t a disadvantage u n l e s s c o o p e r a t i o n w i t h companies or access to Crown C o r p o r a t i o n i n f o r m a t i o n i s a v a i l a b l e . Inventory data are of fundamental importance to any r e s o u r c e a n a l y s i s . Manpower and budget c o n s t r a i n t s are l i k e l y t o remain l i m i t i n g . Recommendations i n c l u d e broadening the type o f resource data c o l l e c t e d through c o o p e r a t i o n amongst agencies (Pearse, 1976) and i n c r e a s e d p a r t i c i p a t i o n by company p e r s o n n e l . Economic i n p u t i n the p l a n n i n g process i s not recommended f o r i t s presence alone. Although not s t u d i e d i n t h i s t h e s i s , t r a n s a c t i o n c o s t s ( a d m i n i s t r a t i o n and i n f o r m a t i o n ) a l s o have e f f i c i e n c y i m p l i c a t i o n s . Expensive data c o l l e c t i o n and m o d e l l i n g are i n e f f i c i e n t i f they c o s t more than p o t e n t i a l g a i n s . Problems e x i s t i n a s s e s s i n g the v a l u e of data because o f p o s s i b l e f u t u r e uses. The need to c r i t i c a l l y assess i n v e n t o r y systems and r e s e a r c h programs and to remain aware o f c o s t s r e l a t i v e to the l i k e l y gains i s r e i n f o r c e d . Great p o t e n t i a l i s seen f o r use of computer technology, to 133 s i m u l a t e v a r i a t i o n s o f the numerous" assumptions, necessary i n a n a l y s i s of environmental c o n s t r a i n t s . The procedure i n c l u d e s no allowance f o r the human v a r i a b l e , w i t h whom r e s p o n s i b i l i t y f o r or g a n i s e d environmental d i s r u p t i o n r e s t s . A c c e l e r a t i o n o f the tr e n d t o t r a i n and inform o p e r a t o r s and r esource managers t o understand the l i k e l y environmental i m p l i c a t i o n s of t h e i r a c t i o n s , to i n t e r p r e t p h y s i c a l c o n d i t i o n s and to r e a c t a p p r o p r i a t e l y i s recommended. Economic a n a l y s i s i n f o r e s t p l a n n i n g i s necessary to d i r e c t the important economic and environmental f u n c t i o n s o f f o r e s t r e s o u r c e s , i n B r i t i s h Columbia, i n pursuance of the g e n e r a l l y accepted o b j e c t i v e o f maximum s o c i a l w e l f a r e . The procedure, o u t l i n e d i n t h i s t h e s i s , i s an i n i t i a l attempt at i n v o l v i n g economic i n p u t i n the p l a n n i n g p r o c e s s . 1 34 LITERATURE CITED Apsey, T.M., M.M. Garton and C. Hajdu, 1973. Economic Trends i n the Canadian Forest Preducts Industry. American Journal of A g r i c u l t u r a l Economics 55(5):974-982. 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F i s h and W i l d l i f e Branch 33p + App. Sloan, G. McG., 1945. Report of the Commissioner R e l a t i n g to the F o r e s t Resources o f B r i t i s h Columbia 1945. King's P r i n t e r , V i c t o r i a . 19 5p. , 19 56. Report o f the Commissioner R e l a t i n g t o the F o r e s t Resources of B r i t i s h Columbia 1956. 2 v o l s . Queen' P r i n t e r , V i c t o r i a . 765p + App. Smith, J.H.G., 1976. Investment I m p l i c a t i o n s of Sustained Y i e l d T h e o r i e s and C r i t e r i a f o r Improving F o r e s t Land Management. In W. M c K i l l o p and W.J. Mead (eds) Timber P o l i c y Issues i n B r i t i s h Columbia. U.B.C. P r e s s , Vancouver pp.142-170. Smith, J.H.G. and M.B. C l a r k , 19 74. R e s u l t s of Methods of C u t t i n g and Related S t u d i e s I n i t i a t e d i n Englemann Spruce-Subalpine F i r F o r e s t s Near Bolean Lake, B.C. i n 1950. 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B r i t i s h Columbia Lumberman 61 (6):41-140 APPENDIX I-FOREST INDUSTRY EMPLOYMENT STATISTICS FOR BRITISH COLUMBIA Contents 1 . D e f i n i t i o n s 2 . B r i t i s h Columbia 3 . Kamloops D i s t r i c t 4 . Employment M u l t i p l i e r s 5. Recommended Employment I n d i c i e s 1v D e f i n i t i o n s a) D i r e c t Employment. T h i s r e f e r s to employment p r o v i d e d by jobs i n l o g g i n g and the wood p r o c e s s i n g i n d u s t r y . b) I n d i r e c t Employment. T h i s r e f e r s to the s e r v i c e s and m a t e r i a l s s u p p l i e d by other s e c t o r s of the economy to the f o r e s t i n d u s t r y . I t i n c l u d e s t r a n s p o r t a t i o n , c a p i t a l and r e p a i r con-s t r u c t i o n , m a t e r i a l s and s u p p l i e s . The B.C.F.S., the resource a d m i n i s t r a t i o n i s a l s o i n c l u d e d i n t h i s category (Reed, 1975a). c) Induced Employment. T h i s group covers the consumer goods and s e r v i c e requirements of the d i r e c t and i n d i r e c t employment c a t e g o r i e s (Reed, 1975a). d) Geographical Aggregation. Employment and income e f f e c t s of environmental c o n s t r a i n t s u s u a l l y d i f f e r between l o c a l , r e g i o n a l and P r o v i n c i a l l e v e l s . - A d d i t i o n a l p r o c e s s i n g , s u p p l i e s , s e r v i c e s and head o f f i c e a d m i n i s t r a t i o n are o f t e n l o c a t e d o r based i n l a r g e c e n t r e s . T h e r e f o r e , t o t a l P r o v i n c i a l e f f e c t s , p a r t i c u l a r l y o f an i n d i r e c t and induced nature a r e l i k e l y to be s u b s t a n t i a l l y g r e a t e r than a t the l o c a l l e v e l . 141 Changes i n employment and income are l i k e l y t o be a l o s s or g a i n to the l o c a l economy wit h i t s l i m i t e d a l t e r n a t i v e o p p o r t u n i t i e s . By c o n t r a s t , l o c a l changes may have minimal e f f e c t on the P r o v i n c i a l economy, because of i t s r e l a t i v e s i z e and the a v a i l a b i l i t y of a l t e r n a t i v e investments and employment o p p o r t u n i t i e s elsewhere i n the economy. Pr o d u c t i o n and employment f i g u r e s f o r B.C. are used t o estimate employment i n d i c e s ; f o r the P r o v i n c e . D i s t r i c t and l o c a l i n d i c i e s are based on data from the Kamloops F o r e s t D i s t r i c t . 2. B r i t i s h Columbia a) Sources of Information. B.C. F o r e s t S e r v i c e Annual Reports f o r volumes of roundwood h a r v e s t e d . a n n u a l l y . S t a t i s t i c s Canada f o r F o r e s t Industry employment f i g u r e s . b) Table 20 D i r e c t Employment i n the B.C. F o r e s t Industry 1965-1974  (Includes l o g g i n g , wood p r o c e s s i n g and pulp and paper i n d u s t r i e s ) Year T o t a l employed Volume harvested (thousand m3) Man-yea thou'sam 1965 73,421 43,410 1 '69 1966 73,324 45,360 1 '62 1967 71,428 44,540 1 '60 1968 72,780 48,140 1 «51 1969 76,875 53,520 1 .44 1970 73,999 54,740 1 '35 1971 78,343 56,550 1 «39 1972 83,599 55,610 1 »50 1973 92,235 70,140 1 «32 1974 87,350 60,030 1 «46 142 F I G U R E 4 D I R E C T EMPLOYMENT I N THE B . C . FOREST INDUSTRY 19 65-1974 ( m a n - y e a r s/1,000 m 3 ) 1 -.6 P r o v i n c i a l O K a m l o o p s F o r e s t D i s t r i c t • .rx ( l o g g i n g a n d s a w m i l l i n g ) Recommended v a l u e s ® 1 »5 4 1 - 4 4 1*3 i 1 «2 1 v l 1 »0 A 0 « 9 1966 1968 1970 1972 . 1974 1976 Y e a r 143 From the t r e n d , drawn i n F i g u r e 4, a c u r r e n t d i r e c t employ-ment index o f 1*4 man-years/1,000 m3 i s recommended f o r the P r o v i n c i a l f o r e s t i n d u s t r y . 3. Kamloops D i s t r i c t a) Source of Information. The annual roundwood h a r v e s t s and the i n d u s t r y employment f i g u r e s are from F o r e s t S e r v i c e D i s t r i c t Management Reports. b) Table 21 D i r e c t Employment i n the F o r e s t Industry Kamloops F o r e s t D i s t r i c t 1967-1976 (Logging and s a w m i l l i n g i n d u s t r i e s ) Year T o t a l employed. Man-years Volume Man -ye men man- (allow 10 mth's harvested 1 , 000 months per year) (thousand m3) 1967 8,365 73,097 7,310 6,040 1 •21 1968 7,843 71,492 7,149 6,150 1 •16 1969 9 ,260 89,571 8,957 7,490 1 •20 1970 8,660 81,581 8,158 7,360 1 •11 1971 9,141 86,902 8,690 8,280 •1 •05 1972 7,426 72,862 7,286 7 ,220 1 •01 1973 9 ,073 92,072 9 ,207 8,370 1 •10 1974 7,730 70,217 7,022 6,260 1 •12 1975 7,385 65,851 6,585 5,610 1 •17 1976 7,699 78,126 7,813 7,940 0 •98 From F i g u r e 4 a b a s i c employment index of 1*05 man-years/ 1,000 m3 i s recommended f o r 1978. I f the employment f i g u r e s f o r the D i s t r i c t plywood i n d u s t r y are added a d i r e c t employment index of 1*2 man-years/1,0 00 m3 i s ob t a i n e d f o r the Kamloops F o r e s t D i s t r i c t - Plywood i n d u s t r y f i g u r e s were obtained only f o r 1976. These were a t o t a l of 8,480 man-months or 848 man-years (ten months work per man-year). 144 Average annual volume harvested over the ten years 19 67 to 1976 was 7,069,000 m3. For l o g g i n g and m i l l i n g a t 1*05 man-years per 1,000 m3 t h i s r e p r e s e n t s 7,422 man-years. I f the 848 man-years f o r the plywood i n d u s t r y i s added to t h i s and the t o t a l d i v i d e d by 7,069,000 m3 a f i g u r e of 1*18 man-years per 1,0 00 m3 i s o b t a i n e d . Rounding t h i s number r e s u l t s i n an index o f 1»2 man-years per 1,000 m3. 4. Employment M u l t i p l i e r s f o r the B.C. F o r e s t Industry a) The m u l t i p l i e r i s d e f i n e d as the d i r e c t , i n d i r e c t and induced employment d i v i d e d by the d i r e c t employment. Studi e s by Reed (1973) i n d i c a t e d employment m u l t i p l i e r s o f : P r i n c e George 2»43 Okanagan 2»49 The P r o v i n c i a l m u l t i p l i e r was estimated a t 2*8 ( i . e . each job i n the f o r e s t i n d u s t r y i s r e l a t e d to 1*8 jobs i n other i n d u s t r i e s ) . b) Source o f i n f o r m a t i o n : "The C e n t r a l Report 76" by the B.C. M i n i s t r y of Economic Development (1976). In i t s v a r i o u s development p r o f i l e s t h i s r e p o r t used r e g i o n a l employment m u l t i p l i e r s f o r i n d u s t r y ( i n c l u d i n g f o r e s t r y ) of 2«6 i n c r e a s i n g to 2*7 or 2«8 as development progressed. c) F i g u r e s obtained from d i s c u s s i o n w i t h B.C.F.S. p e r s o n n e l . D i r e c t Employment at a r e g i o n a l l e v e l (with the pulp i n d u s t r y excluded) 1-15 to 1*24 men per 1,000 m3. I n d i r e c t employment: 145 Industry Jobs per 1,000 m 3 T r a n s p o r t other than l o g s 0*21 - 0»28 C a p i t a l and r e p a i r 0*14 - 0*25 M a t e r i a l s and supply 0*04 - 0»09 T o t a l 0«39 - 0«62 Induced employment m u l t i p l i e r s . The m u l t i p l i e r i s d e f i n e d as d i r e c t , i n d i r e c t and induced employment d i v i d e d by d i r e c t and i n d i r e c t employment. M u l t i p l i e r Small area 1-2 - 1*3 Larger area 1*6 - 1*8 Province c l o s e to 2*0 I f the i n d i r e c t and induced employment measures are combined i t i s found t h a t expected employment m u l t i p l i e r s a r e : Small area - L o c a l e 1*5 - 2*0 Larger area - Region 2*1 - 2*7 Province 2»5 - 3»2 •5. Recommended Employment I n d i e i e s L e v e l D i r e c t employment Employment m u l t i p l i e r (man-years/1,0 00 m3) L o c a l 1*2 1«8 Regional 1*2 2«45 P r o v i n c i a l 1*4 2*8 146 -APPENDIX II FOREST INDUSTRY VALUE ADDED STATISTICS FOR BRITISH COLUMBIA Contents 1 . D e f i n i t i o n 2. Sources of Information 3 . Tabulated S t a t i s t i c s 4 . Discussion and Recommendations 1 . D e f i n i t i o n of Value Added "The s e l l i n g value of shipments minus the cost of manufac-turing materials and supplies minus the cost of fuel and elec-t r i c i t y consumed plus or minus inventory adjustments. This measure of value eliminates double counting between sectors of the industry. However i t does tend to understate the impact of the industry as i t ignores important elements of cost (raw materials, energy) which must be recovered from sales revenue." (Reed, 1 9 7 3 ) . 2. Sources of Information Volumes of roundwood harvested from B.C. Forest Service Annual Reports. Value added s t a t i s t i c s from S t a t i s t i c s Canada. Industrial roundwood end use i n B.C. ( 1 9 6 3 , 1973) from Reed ( 1 9 7 5 a ) . 3 . Tabulated S t a t i s t i c s a) Changes i n allowable cut i n which supply of pulplogs i n addition to sawlogs i s effected. The value added figure i s based on the summation of values added for the logging, wood 147 p r o c e s s i n g and pulp and paper s e c t o r s (Table 22). Table 22 Average Value Added (per m3) of Logs Harvested - B.C. F o r e s t Industry 19 65-1974 Year Value added (thousand d o l l a r s ) Log volume (thousand m3) Average v a l u e added ($/m3) 1965 848,128 43,410 19*5 1966 875,309 45,360 19-3 1967 909 ,412 44,540 ' 20*4 19 68 1,105,599 48,140 23*0 1969 1,225,791 53,520 22 »9 1970 1,072,860 54,740 19-6 1971 1,237,802 56,550 21 «9 1972 1,567,712 55,610 28«2 1973 2,205,056 70,140 31 «4 1974 2,270,073 60,030 37*8 b) Small changes i n a l l o w a b l e c u t . The pulp and paper component of the i n d u s t r y v a l u e added i s excluded. Pulp m i l l s depend on l a r g e volumes of wood and t h e i r h i g h c a p i t a l c o s t demand a sure supply of raw m a t e r i a l . Sawmills and oth e r wood p r o c e s s i n g p l a n t s are more s e n s i t i v e to s m a l l changes i n wood supply because o f t h e i r lower c a p i t a l c o s t and p r o d u c t i o n . A l s o i n the i n t e r i o r n e a r l y a l l the pulp wood supply i s from r e s i d u e s and ve r y l i t t l e d i r e c t l y from the l o g . The t o t a l volume of logs i s reduced by 15% from Table 22 to al l o w f o r logs d e s t i n e d d i r e c t l y f o r p u l p m i l l s (15% of t o t a l from 19 63 and 1973 f i g u r e s ) . The value added f o r l o g g i n g i s a l s o reduced by 15% (lack o f i n f o r m a t i o n to d i f f e r e n t i a t e between v a l u e added f o r pulp l o g s and f o r sawlogs) (Table 23). 148 Tabl e 23 Average Value Added (per m3) of Logs Harvested B.C. Logging and Wood P r o c e s s i n g I n d u s t r i e s 19 65-1974 Year Value added (thousand d o l l a r s ) Log volume (thousand m3) Average v a l u e ($/m3) 1965 561,259 36,880 15*2 1966 58 8,36 7 38,540 15*3 1967 617,635 37,840 16*3 1968 786,214 40,890 19-2 1969 838,452 45,460 18*4 1970 666,047 46,500 14*3 1971 834,166 48,030 17*4 1972 1,131,523 47,240 24»0 1973 1,589,405 59,580 26*7 1974 1,325,245 51,000 26«0 4. D i s c u s s i o n and Recommendations Trends i n both Tables 22 and 23 are shown i n F i g u r e 5. T h i s p o r t r a y s a r a p i d l y r i s i n g v alue added t r e n d from 1970 to 1974 due to both volume and p r i c e e f f e c t s . Without more r e c e n t f i g u r e s (1975, 1976) i t i s d i f f i c u l t to a s c e r t a i n whether t h i s t r end c o n t i n u e s , and what the l i k e l y v a l u e s are today. For example without s u b s t a n t i a l market r e s e a r c h i t i s not known whether the wide divergence between Tables 22 and 23 i n 1974 due to g r e a t l y i n c r e a s e d pulp and paper p r i c e s , has been maintained. The depressed market c o n d i t i o n s i n 1975 and 1976 i n d i c a t e t h a t the values added per c u n i t have probably i n c r e a s e d d u r i n g the 19 74 to 1977 p e r i o d a t a r a t e somewhat l e s s than f o r the 1971 to 1974 p e r i o d . I t i s recommended t h a t f i g u r e s of $42»5/m 3 f o r Table 22 and 149 FIGURE 5 VALUE ADDED PER m3 OF LOGS HARVESTED B.C. FOREST INDUSTRY 19 65-1974 Logging, wood processing and pulp and paper o Logging and "wood processing x 40 35 J 30 Value" added ($/m3) 25 J 20 4 15 10 J i> o Recommended values • 19.66 196 8 1970 1972 Years 1974 1976 1978 150 $32/m3 f o r Table 2 3 be used to o b t a i n orders of magnitude of e f f e c t s of r e d u c t i o n i n a l l o w a b l e c u t . I f a more c r i t i c a l a n a l y s i s i s r e q u i r e d f u r t h e r r e s e a r c h w i l l be necessary. 151 APPENDIX I I I GOVERNMENT REVENUES FROM THE FOREST INDUSTRY IN BRITISH COLUMBIA Contents 1. I n t r o d u c t i o n 2. F o r e s t S e r v i c e Revenues 3. T o t a l Government Revenues 4. D i s c u s s i o n and Recommendations 5. Recent Stumpage Values f o r c u t permits of s i m i l a r type and of c l o s e p r o x i m i t y t o the Seymour R i v e r 1. I n t r o d u c t i o n Government revenues (both f e d e r a l and p r o v i n c i a l ) from the f o r e s t i n d u s t r y i n c l u d e F o r e s t Serv i ce revenues (stumpage, r o y a l t y and o t h e r charges) which are r e a d i l y i d e n t i f i e d andr v a r i o u s forms of taxes on which f i g u r e s are l e s s a c c e s s i b l e . Recent f i g u r e s g i v e n i n the f o l l o w i n g t a b l e s are d i s c u s s e d and form, the b a s i s f o r recommended v a l u e s . 2. F o r e s t S e r v i c e Revenues 1975-1975 Sources of i n f o r m a t i o n are the 1976 Royal Commission Report (Pearse, 1976) and B.C.F.S. Annual Reports, (Table 24). 3. T o t a l Government Revenues Sources of i n f o r m a t i o n : Reed (1973) and Reed (1975a) (Tables 25 and 26). 4. D i s c u s s i o n and Recommendations Observations from examination of Tables 24, 25 and 26 and F i g u r e 6: 152 Tabl e 24 B.C. F o r e s t S e r v i c e Revenues 19 65-1976 P r o v i n c i a l Year Stumpage Royalty and T o t a l Volume other harvested charges (thousand $ m i l l i o n m3) Kamloops Revenue D i s t r i c t Revenue ($/m3) ($/m3) 1965 42«0 5*6 47*6 43,410 1 •10 1966 42*6 6-4 49»0 45,360 1 •08 1 «49 1967 34*7 7-3 42*0 44,540 0 •94 0*78 1968 44.4 9.4 53*8 48,140 1 •12 2»33 1969 78»3 11 »2 89.5 53,520 1 •67 1 «87 1970 53*5 11 -5 65-0. 54,740 1 •19 1 «17 1971 49 -7 11*2 60»9 56,550 1 •08 N.A. 1972 91 »2 11 »4 102*6 55,610 1 •84 N.A. 1973 230*6 14*2 244*8 70, 140 3 •49 5«44 1974 181*6 15-6 197-2 60,030 3 •29 4.59 1975 43*4 16-6 60«0 50,030 1 •20 0*74 1976 0»71 N.A. = Not a v a i l a b l e See F i g u r e 6 1 5 3 FIGURE 6 AVERAGE B.C. FOREST SERVICE REVENUES 19 6 5 - 1 9 7 6 ($/m3) x P r o v i n c e o Kamloops F o r e s t x. D i s t r i c t X o 0 • 5 ' > i t t i i i 1 9 6 6 1 9 6 8 1 9 7 0 1 9 7 2 1 9 7 4 1 9 7 6 1 9 7 8 Years T a b l e 25 F e d e r a l Taxes from the B.C". F o r e s t Industry : 1969, 1971 and 1972 1969 1970 . 1972 Revenue $/m3 Revenue $/m3 Revenue $/m3 <$ million) . ($ million) ($ million) Manu-f a c t u r e r s 104*1 1*9 50*6 0*9 101*7 1*8 Employee 76*6 1*4 87*1 1*6 133*8 2*4 T o t a l d i r e c t 180*7 3*3 137*7 2*5 2 35 * 5 4*2 I n d i r e c t employee 113*5 2*1 119*7 2*3 160*5 2*9 T o t a l 294*2 5*5 257*2 4*8 396*0 7*1 Table 2 6 P r o v i n c i a l Revenues from the B.C. F o r e s t Industry 1969, 1971 and 1972  1969 1970 1972 Revenue $/m3 Revenue $/m3 Revenue $/m3 ($ million) ' ($ million) ($ million) F.S. Revenue 89*5 1*7 65*0 1*2 102*6 1*8 Manufac-turers' tax 104*8 2*0 67*5 1*2 93*2 1*7 Employee tax 19*9 0*4 23*0 0*4 43*3 0*8 Total direct 214*2 4*0 155*5 2*8 239*1 4*3 Indirect employees 46*5 0*9 48*4 0*9 80*0 1*4 Total 260*7 4*9 203*9 3*7 319*1 5*7 Note: P r o v i n c i a l revenues i n c l u d e s m u n i c i p a l taxes 155 a) S u b s t a n t i a l f l u c t u a t i o n of f o r e s t s e r v i c e revenues with market c o n d i t i o n s (e.g. poor year 1 9 7 0 , good years 1 9 7 3 and 1 9 7 4 ) . b) The Kamloops f o r e s t d i s t r i c t revenues show g r e a t e r f l u c t u a -t i o n s than the P r o v i n c i a l f i g u r e s . c) The manufacturers tax a l s o depends g r e a t l y on market c o n d i t i o n s (e.g. poor year 1 9 7 0 , b e t t e r year 1 9 6 9 ) . Other comments: d) I t i s assumed t h a t tax r e g u l a t i o n s are s i m i l a r to the p e r i o d 1 9 6 9 to 1 9 7 2 . e) The l a c k of f u l l data f o r the l a s t f i v e years and f l u c t u a -t i o n s with market c o n d i t i o n s p r e c l u d e a p r e c i s e estimate of revenue v a l u e s . A l l t h a t can be g i v e n i s an i n d i c a t i o n of the magnitude of average v a l u e s . f) I f i n f o r m a t i o n on l o c a l stumpage r a t e s f o r the d i f f e r e n t s p e c i e s , and on l o c a l i n d u s t r y t a x a t i o n r a t e s i s a v a i l a b l e , t h i s should be used. g) Average r a t e s of Government revenue from the f o r e s t i n d u s t r y . 1 ) P r o v i n c i a l revenues $/m3 Manufacturers' tax and F o r e s t S e r v i c e revenues 2 » 8 - 4-0 Employee income tax 0*9 T o t a l revenues from i n d u s t r y and employees 3'7 - 4.9 I n d i r e c t and induced employee t a x a t i o n 1 »6 T o t a l 5.3 - 6 » 5 1 5 6 2 ) F e d e r a l revenues $/m3 Manufacturers tax 1 - 2 Employee income tax 2 » 5 T o t a l revenues from i n d u s t r y and employees 3 » 5 - 4 * 5 I n d i r e c t and induced employee t a x a t i o n 3 - 0 T o t a l 6 - 5 - 7 - 5 h) Notes Employee income tax estimates are l i k e l y t o be c o n s e r v a t i v e as a minimum i n c r e a s e has been allowed f o r s i n c e 1 9 7 2 . In u s i n g these v a l u e s the c o s t of h a r v e s t i n g o p e r a t i o n s should be c o n s i d e r e d . Adverse h a r v e s t i n g c o n d i t i o n s w i l l r e s u l t i n low or zero economic r e n t . T h i s i m p l i e s : F o r e s t S e r v i c e revenues a t a minimum of $ 0 * 4 / m 3 . Lower manufacturers' t a x a t i o n , e.g. P r o v i n c i a l towards $ 1/m 3 and F e d e r a l towards $ 1/m 3. Employee income tax may i n c r e a s e s l i g h t l y w i t h a h i g h e r labour content i n h a r v e s t i n g . T h i s may be c a l c u l a t e d knowing the i n c r e a s e i n l a b o u r , average wage and tax r a t e s and p r o d u c t i v i t y changes. The l e v e l of government revenue t h a t should be a p p l i e d t o a change i n a l l o w a b l e c u t depends on assumptions of whether jobs are r e a d i l y a v a i l a b l e elsewhere i n the economy. C u r r e n t l y the unemployment r a t e exceeds 8% i n B.C. and labour m o b i l i t y cannot always be assumed. I f a l l o w a b l e c u t r e d u c t i o n s do have a permanent e f f e c t on employment, one should be aware t h a t government revenues i n 157 e f f e c t are reduced by paying out unemployment b e n e f i t s as w e l l as a decrease i n income tax. 5. Recent Stumpage Values f o r Cut Permits of S i m i l a r Type and  a t C l o s e P r o x i m i t y to the Seymour River Hemlock and balsam have stayed c o n s i s t e n t l y a t the minimum stumpage of $0»4/m 3. I n d i c a t e d stumpage has been minus $5 to minus $10/m3. Spruce has predominately stayed at $0«4/m 3 w i t h an i n d i c a t e d stumpage i n the range of $0 to minus $3»4/m 3. White pine has commonly been i n the range of $14 to $21/m3 d u r i n g 1977. Stumpage v a l u e s f o r cedar from two c u t permits have shown the f o l l o w i n g t r e n d : Cedar stumpage Date • ($/m3) .11.76 0«4 . 2.77 '-0»5 - 1*3 .3.77 1 * 6 - 2 . 4 . 4.77 2»5 . 8.77 1*2 .10.77 3«2 .11.77 4«5 .12.77 6«3 From these f i g u r e s the f o l l o w i n g stumpages were chosen f o r the Seymour R i v e r example: Species Stumpage ($/m3) Cedar 2» 1 D o u g l a s - f i r 2*1 Spruce 0*4 Hemlock 0•4 Balsam 0*4 White p i n e 14• 1 158 N o t e : I t i s l i k e l y t h a t t h e s t u m p a g e f o r D o u g l a s f i r i s s o m e -w h a t h i g h e r . H o w e v e r f i g u r e s w e r e n o t o b t a i n e d f r o m c u t p e r m i t s s t u d i e d a n d a s D o u g l a s f i r c o n t r i b u t e s l e s s t h a n 2% o f t h e t o t a l v a l u m e , i t s e f f e c t o n t o t a l v a l u e s i s s m a l l . 1 5 9 APPENDIX IV VOLUMETRIC INFORMATION FOR MANAGEMENT ALTERNATIVES a AND c Procedure 1 . C o n s t r a i n t areas were measured by f o r e s t type on the 1 : 3 1 6 8 0 (1 i n c h to 4 0 chain) f o r e s t cover map f o r the Seymour R i v e r r e s o u r c e f o l i o . 2 . B.C.F.S. l o c a l and zonal average volume per acre l i n e s were r e f e r r e d to as no d e t a i l e d i n v e n t o r y i n f o r m a t i o n was a v a i l a b l e f o r the area. These volumes (have allowances f o r decay) were reduced by 20% to a l l o w f o r breakage and l o g g i n g waste (based on f i g u r e s f o r s i m i l a r types i n a nearby cut p e r m i t ) . 3 . Merchantable volumes i n Tables 2 , 3- and 5 r e s u l t from a g g r e g a t i n g the products o f f o r e s t type areas and the appro-p r i a t e reduced per acre l i n e volumes. 160 APPENDIX V COSTS OF SELECTION LOGGING LEAVING 50 PER CENT OF THE CROWN COVER A f t e r d e f i n i n g the main assumptions f o r the o p e r a t i o n , the c o s t e f f e c t s o f a reduced volume per ha harvested (compared t o c l e a r c u t t i n g ) and r e t e n t i o n o f the s m a l l e s t t r e e s (piece s i z e e f f e c t s ) are estimated. These are then i n c o r p o r a t e d i n t o c a l c u l a t i o n o f the firmwood l o g g i n g c o s t s (allow f o r decay). 1. Assumptions Costs are from the B.C.F.S. Kamloops F o r e s t D i s t r i c t A p p r a i s a l Manual 19 77. 50% of the crown cover i s r e t a i n e d . Slopes are 0-30%. Average t r e e s i z e i s i n excess of 1m3. Unfavourable problem f a c t o r s (poor drainage) occupy 21-30% o f the area. The s e l e c t i o n p r e s c r i p t i o n reduces the harvested volume by 40% from 495m 3/ha to 300m 3/ha. 2. Cost E f f e c t s o f Reduced Volume From a p p r a i s a l manual: F a l l i n g p l u s $0.-.113/m3 S k i d d i n g p l u s $0»071/m 3 Landings plu s $0»06/m 3 C r u i s i n g - M a r k i n g p l u s $0»046/m 3 3. P i e c e S i z e E f f e c t s Tree s i z e d i s t r i b u t i o n from nearby cut permit i n s i m i l a r 1 f o r e s t types (corresponds to Table 8 i n Chapter V I I ) . Tree volume (m3) 0*42 0*57 0*85 1*0 p l u s % o f h a r v e s t volume i f c l e a r c u t 4 3 5 88 % of h a r v e s t volume i f s e l e c t i o n cut 2 98 These t r e e s i z e d i s t r i b u t i o n s were a p p l i e d to the a p p r a i s manual procedure to o b t a i n the estimates o f c o s t d i f f e r e n c e s ( c l e a r c u t — s e l e c t i o n c u t ) . F a l l i n g $0*053/m3 L i n e s k i d d i n g $0*166/m3 Loading and h a u l i n g unable to estimate c o s t d i f f e r e n c e s . Not expected to be gre a t as even f o r c l e a r c u t o p e r a t i o n , the volume i s conc e n t r a t e d i n l a r g e t r e e s ( 1*0m3) 4. Summary of Logging Costs Cost element C l e a r c u t S e l e c t i o n ($/m3) F a l l i n g ' 1*416 1*476 Bucking 0*459 0*459 Skidding 3*479 3*383 Loading 1*059 1*059 Haul i n g (32 km) 2*649 2*649 Towing (58 km) 1*307 1*307 Management and s u p e r v i s i o n 1*024 1*024 Cruis i n g - m a r k i n g 0*106 0*177 Landings . 0*2.93 . . 0*463 11*79 12*00 Roading c o s t s are examined i n s e c t i o n 7.c of Chapter V I I . 162 5. Firmwood Timber H a r v e s t i n g Costs I t i s assumed t h a t firmwood h a r v e s t i n g c o s t s i n c r e a s e i n p r o p o r t i o n to the decay pres e n t (Dobie, 1976). Tab l e 27 Firmwood Timber H a r v e s t i n g Costs decay C l e a r c u t t i n g S e l e c t i o n c u t t i n g ($/m3) ($/m3) 0 11 .79 12-00 10 13-10 13-33 15 13«87 14-12 20 14«74 15-00 25 15-72 16-00 30 16-84 17-14 35 18-14 18-46 40 19-65 20-00 APPENDIX VI MAPS SHOWING LOCATION AND MAJOR CONSTRAINTS OF THE SEYMOUR RIVER RESOURCE FOLIO 1 6 4 FIGURE 7 

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