Assessing the Economic Value of Public Lands
The centerpiece of the debate on how to value America’s public lands is their contribution to job creation. The push for such job creation estimates accelerated in the years since the recession due to persistent unemployment and the need to justify agency expenditures in a tight budget climate.
The debate on how to value America’s public lands is highlighted in a recent article in High Country News that addresses Sen. Tom Coburn’s report on national parks. The centerpiece of this debate is the contribution of public lands to job creation. This is a variation on a debate that I have seen and been involved in numerous times. Politicians and the public expect economists to tally the number of jobs that a project or policy will “create.” The push for such estimates accelerated in the years since the recession due to persistent unemployment and the need to justify agency expenditures in a tight budget climate.
Here’s some of what we’ve learned: the recreation industry in the US accounts for approximately six million jobs, which is nearly 10-times the number of jobs in the mining sector. But average wages in the mining sector are among the highest, while those in recreation are among the lowest. So how do we use this information to assess the economic value of different public land uses? Typically, we don’t.
The value of public lands is in their contribution to social well-being.
Jobs are a politically salient measure, but employment estimates don’t reveal the economic value of national parks, national forests, and other public lands. The value of public lands is in their contribution to social well-being. Market activity and the associated jobs are only one part of the total economic value of our public lands. An emphasis on jobs will tell us about commodity production and visitor spending, but much of what we value is excluded from these calculations. Additionally, failure to account for externalities (e.g., air pollution from oil and gas operations) will overstate the social value of market activities on public lands.
Much of what we value is not traded in the marketplace: the provision of clean water to downstream communities, carbon sequestration, protection of habitat for threatened and endangered species, and the value to visitors beyond what they spend while traveling to the site. All of these ecosystem services contribute to social well-being, yet they do not translate into employment. In contrast, ecosystem destruction could create jobs, for example, as water treatment plants are needed to compensate for the loss of natural purification capacity. Consideration of non-market goods and services is essential to ensuring that conservation of our public lands is seen as an economic benefit, not just a cost.
Federal land managers increasingly recognize the importance of accounting for non-market sources of value in decision-making. The Forest Service’s 2012 Planning Rule incorporates ecosystem services. The Bureau of Land Management recently released guidance on the consideration of non-market values in decision-making. The Park Service regularly incorporates non-market values in its economic analyses. Nevertheless, it remains challenging to quantify, let alone monetize, the flow of ecosystem services and other non-market values from public lands. This challenge makes it appealing to focus on something observable and easily calculable, such as jobs. The expansion of environmental markets, particularly for water and carbon, improves our ability to describe the economic value of goods and services that typically lack prices. Nevertheless, such markets remain the exception in the United States.
Debates on how to prioritize limited budgets will be more fruitful if we can focus our attention on improving social well-being: understanding how and why federal lands are valuable to the public. This approach can incorporate the desire for stable employment in rural communities as well as the need for climate regulation and water purification. Moving away from a job-centric view may improve public land management, as conservation and economic prosperity need not be opposing goals.
About the Author
Delilah Jaworski (2013 Fellow) is a social scientist with the TEAMS Enterprise Unit of the U.S. Forest Service. She works with natural resource and land management agencies across the United States to incorporate social and economic considerations into National Environmental Policy Act and long-term planning documents. She began her career as a Presidential Management Fellow with the Bureau of Land Management (BLM) in Denver, Colorado. During her tenure in government, she has completed rotational assignments to the U.S. Institute for Environmental Conflict Resolution and the Gila District Office of the BLM in southern Arizona. Much of her work focuses on the inclusion of ecosystem service values in project and policy evaluation. Delilah has an M.Sc. in environment and development from the London School of Economics and a B.A. in Middle Eastern studies from the George Washington University.
Much of what we value is not traded in the marketplace: the provision of clean water to downstream communities, carbon sequestration, protection of habitat for threatened and endangered species, and the value to visitors beyond what they spend while traveling to the site.