[The] . . . mostly unnoticed renewal of the rural and mountainous East--not the spotted owl, not the salvation of Alaska's pristine ranges--represents the great environmental story of the United States, and in some ways of the whole world.¹

[T]he forest and farmland landscape of the Appalachians, as well as many other parts of the East and South, has come full circle. By the 1960s and 1970s, the pattern of forest, fields, and pastures was similar to that prior to 1800, its appearance much like it must have been prior to the American Revolution.²

Background

These two quotes are taken from an article in The Atlantic Monthly by environmental author Bill McKibben.3 McKibben titled his article "An Explosion of Green" to dramatize the successful reforestation of the cut-over forests of the eastern United States. The quotes capture the salient history of the eastern United States forests, including the South, from the Native American era to the present. As other regions of the world were experiencing widespread forest devastation, the eastern forests were expanding, ". . . a patch of green spreading like mold across bread, and spreading fast."⁴

The history of the eastern forests is a history of change by natural and human forces. The changes wrought by humans reflect the changing perception of the values of forests. The British environmental geographer, Michael Williams, describes the clearing of forests during the first two centuries of the American republic:

The most obvious manifestation of change to which the clearing of the forest contributed significantly has been the emergence of a dynamic, buoyant nation of 240 million people who enjoy a greater affluence, probably have greater individual freedoms, and certainly exercise more power on a global scale than the people of a country at any other time in history. . . . There are many reasons for this prosperity and power, but it would not be incorrect say that the foundations were firmly laid with the exploitation and use of the abundant natural resources of the continent, of which the forest was one, if not the most important. . . . Industrialization in America rose on the sheer abundance of wood.⁵

Williams cautions that the early economic contribution of America's forests "had been wrought at some considerable cost to the environment and its original occupants--human, animal, and vegetable."⁶ The recovery of the eastern forests and the erasure of the scars of the earlier forest destruction are the products of the dedicated efforts of thousands of private forestland owners, professional foresters, and conservation organizations. Together, they worked to rehabilitate eastern forestlands--lands that then had little or no economic value. It is ironic that these lands, now covered with valuable and attractive forests, are the objects of bitter disputes over their use. No longer "the lands nobody wanted," these forests are highly valued for their timber, wildlife habitat, wetlands, watersheds, scenic beauty, and other amenity benefits.

The chip mill conflict

The dispute over wood chip mills in Virginia (and other southern states) is the most recent conflict over the management of Virginia's forests. Chip mills are temporary facilities for converting logs into wood chips, which are used to produce paper. Chip production is not new; what is new is the location of the chipping facility in the woods rather than at the pulp mill. The chip mills have generated strong opposition among some members of the public amid calls for their ban.

Opponents believe that chip mills encourage clear-cutting, deplete nutrients from the soil, pollute the waterways, destroy wildlife and fisheries habitats, and reduce hunting opportunities. They are particularly incensed that some of the wood chips are exported to foreign markets. Others, including community leaders, fear the damage to tourism business of unsightly clear-cuts and the loss to residents of forest amenity benefits. Still others fear the loss of jobs. They argue that chip mills require fewer workers per acre of forest harvested than more conventional wood processing activities. Some complain that the state's forest regulations are inadequate. Others argue that the Virginia Department of Forestry (DOF) needs additional funds to better enforce Virginia's forestry best management practices (BMPs).

Mill defenders argue that opponents' fears are misguided. Wood has long been chipped to produce pulp for papermaking. All that has changed, they say, is that the chipping operation has been moved from the pulp mill into the woods. Locating the chipping operation in the woods reduces hauling costs because the cost per ton of transporting chips is less than that of transporting logs. It also makes it economical to chip smaller trees, thereby increasing wood utilization and the economic return to landowners from their timber investment. The higher economic return will encourage more intensive forest management, mill defenders contend. More intensive forest management should, in turn, lead to more vigorous and healthy forests. In addition, the ability to remove more trees could make it easier to replace forests, whose high-graded species composition poorly represents pre-Columbian forests, with species that more closely resemble those earlier forests. This, in turn, may make it easier to re-introduce native wildlife species that have been eliminated but whose reintroduction may be problematical in high-graded forests.

Finally, mill supporters believe that the movement to ban chip mills camouflages the real agenda, which is to halt or substantially restrict all timber harvesting, especially clear-cutting, of private forests. Landowners believe that they should have the right to sell their timber to whomever they wish. They also resent the threat of more government intervention. The forest industry fears the loss of competitiveness, both domestic and global, if clear-cutting is banned. The industry is concerned about potential timber supply shortages and, to justify that fear, cites the drastic reduction in federal timber harvesting and calls from environmentalists for a complete ban on logging in national forests.

A review of comments made in public hearings, to the press, and on the Internet indicates that chip mills are not the real issue. The real issues appear to be increased timber harvesting, clear-cutting, water pollution, habitat loss, aesthetics, and other impacts associated with timber harvesting. Del. Clarence E. Phillips is quoted in the Richmond Times Dispatch as saying, "I'm not opposed to the chip mill or logging. . . . The issue is how it is done. The real issue and problem is water pollution."⁷

Most of the issues raised by discussants predate the arrival of chip mills, and most will remain even if chip mills are banned. Only the harvesting of very small trees is directly related to chip mills, and even that activity has as much to do with wood and paper prices as it does chip mill technology. A ban on chip mills is likely to reduce, but not eliminate, clear-cutting. Any impacts of clear-cutting on nutrient loss, wildlife and fish habitat loss, and aesthetic damage will continue essentially unaffected. Timber harvesting costs (including hauling) will increase slightly, and landowners will realize less income from timber sales, perhaps discouraging forest management in some small measure.

Wood chip exports would likely continue with little change because chip exports have little to do with chip mills and more to do with the sharp reduction in public timber harvesting in the West, chip demand in Asia, and new technology that permits greater use of hardwood chips in papermaking. Figure 1 shows the trend in hardwood chip exports from the South from 1989 through 1999. Chip exports increased rapidly during the years 1991 to 1996 but have been declining sharply since. The period of rapid increase corresponds to an increase in Japan's demand for chips and strengthening of the yen. The decline since 1996 corresponds to the Asian crisis and weakening of the yen. In short, the behavior of chip exports is closely related to the health of the Japanese economy--more than 90 percent of chip exports go to Japan--and has little or nothing to do with chip mill technology.

Banning chip mills will not resolve differences in opinion over the management of Virginia's forests but, instead, will merely shift the conflict to another venue where it will be taken up again with all the same enthusiasm, name calling, and accusations.

The need for a comprehensive state forest policy

The chip mill controversy has distracted public attention from serious and broader forest policy matters that need to be addressed if Virginia's forests are to continue to serve present and future generations of Virginians. The conflict is a symptom of a broader forest problem: the absence of a comprehensive state forest policy based on current forest science and the public's perception of the purposes of the commonwealth's forests. Virginia does not have a comprehensive forest policy; rather, it has a timber policy, a recreation policy, a water policy, a wildlife policy, and so on. The responsibilities for the various benefits of the forests are distributed among several state agencies, with only informal coordination among agencies. The fault for this situation does not lie with the state agencies. Virginia's forest policy--like that of many states--has developed in a largely ad hoc manner, responding to specific crises, such as the current wood chip conflict, and the belief that forestry issues can be isolated and treated as independent problems. Institutional change comes slowly, and the ability of state agencies to adjust to new science and changing public attitudes towards forest use is limited by state resource laws.

What makes modern forestry policy issues so difficult is that the public often does not face a simple choice between "good and evil" but rather a choice among "goods." For example, it is fair to say that most Virginians want the state's forests to continue to produce forest products and the associated jobs and income. But they also want the forests to continue to produce amenity benefits, and they want them managed on a sustainable basis to ensure the health of forest systems and to provide for future generations. The great challenge of forest policy is how to strike a balance among the desired uses of the forests in the presence of scientific uncertainty.

Some might argue that Virginia's current approach to state forest policy has served the commonwealth well and "if it ain't broke, don't fix it." Others recommend a "quick-fix" solution: if current BMPs are inadequate, then they should be strengthened; if there is inadequate enforcement because of DOF budget constraints, then increase the agency's BMP budget. The problem with the quick-fix solution is that it assumes that more and tougher regulation is the answer to forest resource problems. It does not address the broader concerns of biodiversity loss, aesthetics, wildlife habitat destruction, and ecosystem interdependencies.

A comprehensive commonwealth forest policy would benefit Virginia's forest industry. Global markets are increasingly important outlets for the commonwealth's forest products. A forest policy that emphasizes sustainable forest management would strengthen Virginia's competitive position in markets that are becoming increasingly sensitive to environmental and sustainable forest management issues. Forest certification and eco-labeling are rapidly gaining acceptance in global markets. For example, four major wood buyers (Ikea Group, Home Depot, Wilkes Lumber Company, and HomeBase) recently announced policies to restrict their wood purchases to wood produced from sustainably managed forests. Competition in the marketplace will encourage other buyers to follow suit. States and forestry associations will likely develop various kinds of eco-labeling marketing programs designed to retain or increase their share of the timber market. A sustainable forest management policy would also complement and strengthen the forest industry's "sustainable forestry initiative."

Even if current policy served us well in the past, when timber values were dominant, it is no longer adequate in an era in which non-timber values are increasing in importance. The science of forestry has progressed significantly in recent decades and now recognizes the importance of interdependencies among forest system components and linkages to social and economic systems. A policy approach that treats the many issues as separable independent problems virtually guarantees that a "solution" to some becomes a "problem" to others. The many issues raised in the chip mill controversy demonstrate the desirability of a fresh and thorough review of the commonwealth's current approach to forest policy.

What kind of forest policy?

Some may favor a forest policy based on the "balance of nature" doctrine. That is, left alone, a forest will achieve a permanent, steady state balance among its components. The objective of management should thus be to achieve that balance. The "balance of nature" doctrine has lost favor among scientists, however, and has been replaced by the notion of ecosystems as dynamic, continually changing biological phenomena. Accordingly, the simplistic "let nature take its course" or "nature knows best" guides to forest management have lost much of their scientific legitimacy.⁸

Some may favor an ecosystem approach, perhaps in the belief that it would be politically neutral and would avoid the kind of nasty political fights that characterize the "timber wars" over the management of public forests. The notion that ecosystem management somehow avoids politics is an illusion. Our understanding of ecosystems is limited, and scientists cannot always agree on the precise geographic boundaries of ecosystems. An ecosystem approach would necessarily be political for the simple reason that ecosystems overlap ownership boundaries.

Our complex system of federal, state, and private forest ownerships ensures that any ecosystem management unit would involve two or more ownerships. A way must be devised to convince landowners with diverse ownership objectives, but sharing a common ecosystem, to cooperate in the management of the system. Virginia cannot look to science alone to provide the answers to the appropriate forest policy. Lindblom and Woodhouse recognize the dilemma:

[A] deep conflict runs through common attitudes toward policy making. People want policy to be informed and well analyzed, perhaps even correct or scientific; yet they also want policy making to be democratic . . . .⁹

Ecology can inform policy decisions and guide management practices, but only the people of Virginia can decide, through the political process, what sort of forests they want and how to get them. In the final analysis, ecosystem management is as much about politics as it is about science.

From a policy perspective, it is important to distinguish between private forest activities that generate social costs and activities that generate uncompensated social benefits. In the first case, landowners are able to pass some of the costs associated with their activities onto others. In the second case, landowners are not compensated for some of the forest benefits they provide the public. The first category of effects does not present a serious policy challenge--at least not in principle. There are established policy instruments, such as Virginia's forestry BMPs, that can be used to correct for these market failures, either by strengthening existing BMPs or by increasing DOF funding for BMP enforcement. The Environmental Protection Agency has proposed new rules that would designate logging as point source pollution. Point source pollution designation requires a National Pollutant Discharge Elimination System, or NPDES, permit to operate. Logging traditionally has been designated as nonpoint source pollution, which does not require a discharge permit but, instead, is covered by Virginia's BMPs program.¹⁰ If the proposed rule becomes law--and is enforced--then many, if not most, of the water pollution concerns of chip mill opponents would be either eliminated or substantially reduced.

It is the uncompensated benefits, the second category of effects, that require a new and innovative policy. Most people likely agree that private forests generate amenity benefits in addition to timber products. Uncompensated amenity benefits are a common phenomenon of private forest ownership. Store owners, barbers, restauranteurs, and others benefit from tourism expenditures that are at least in part attributable to the scenic beauty of nearby private forests. Travelers enjoy forest benefits for which they do not pay. The value of real property increases as more people want to move to forested areas. Towns and cities benefit from lower water treatment costs. Hunters and wildlife lovers benefit from wildlife habitat provided by forest owners. In some cases, the non-market benefits may be as great or greater than the timber benefits.

Forest owners normally receive no compensation for providing these non-market benefits. This is not a problem as long as forest owners are free to pursue their ownership objectives. It becomes a problem, however, if the government restricts forest owner management activities with the purpose of ensuring the continued provision of the free forest amenity benefits. In effect, landowners would be required to subsidize, in general, residents, tourist-oriented businesses, private homeowners, water consumers, wildlife enthusiasts, and nature lovers. Most people willingly pay for forest products from private forests but expect to enjoy forest amenity benefits without paying for them. They have become accustomed to the free "fringe benefit" of living next to private forests. They may complain when their forest amenity "rights" are threatened. Should private forest owners be expected to provide amenity benefits free of charge, when hotels, restaurants, gas stations, homeowners, real estate agents, and tour operators benefit economically from the beauty of the forests? Should not the beneficiaries pay for the amenity benefits received, just as they pay for timber, paper, plywood, Christmas trees, poles, and other commodities produced by the forests? The practical problem, of course, is that it is difficult for forest owners to exclude others from enjoying the forests and to collect a fee from those who do. There is no reasonable way that forest owners can prevent others from enjoying the beauty of their forests. Thus, other remedies must be sought. There are a number of policy instruments that could be applied to the problem of uncompensated forest amenity benefits. The need is for policy instruments that balance the private forest owners' right to earn a fair return on their forest investment with the public interest in the health of Virginia's forest ecosystems, maintenance of forest biodiversity, and productivity to meet the needs of present and future generations. Regulation is not a promising approach if the desire is to achieve balance among interests. Many stakeholders view regulation as an "extreme" option that does a relatively poor job of weighing competing interests. "

Market-based" incentives to motivate forest owners to continue to provide amenity benefits and to forgo some timber benefits are an attractive option in a predominantly private forest economy. An example of a voluntary agreement between landowners and a local government is the New York City program, adopted in 1997, to compensate upstate forestland owners for providing watershed benefits to the city. Its Watershed Protection and Partnership Programs initiative aims "to build a strong working relationship between the city and its upstate neighbors--the day-to-day stewards of water quality."¹¹ Market-based incentives include full- and partial-interest land purchases (conservation easements), tax-based incentives, and tradable or bankable land purchases. These are not radical, new programs. Virginia uses several varieties of market-based incentives to achieve its conservation goals. For example, several Virginia legislators are considering legislation to purchase critical conservation lands.¹² In addition, the Virginia Department of Forestry and some counties have conservation easement programs. Conservation easements are increasingly popular as a means of compensating private forest landowners for protecting the amenity benefits of their forests without resorting to the coercive power of the state. They provide protection for environmentally important forestlands without infringing upon private property rights.

A democratic process informed by science

The development of a comprehensive Virginia forest policy could begin with a generic environmental impact study (GEIS) of the impacts of forest use on the major forest components. A GEIS is a broad environmental review of the impacts of a wide variety of forest uses not adequately reviewed on a case-by-case basis. A GEIS can analyze the cumulative impacts associated with a number of separate, but related, activities. The focus of the GEIS is on developing broad policy recommendations, whereas project-specific EISs typically compare the impacts of a specific proposed action with limited alternatives. The GEIS can examine as many issues of concern as appropriate. Examples are maintaining timber productivity, forest health, biodiversity, forest wildlife and fish management, water quality, forest soils, forest recreation and tourism, aesthetics, and unique cultural resources. A GEIS advisory committee could be established to oversee the GEIS process and to conduct public hearings around the state to discuss the study results and to evaluate the report's policy recommendations. The GEIS results would inform public deliberations but not drive them.

The end product would be a comprehensive forest policy consisting of legislation, regulations, and market-based incentives. The policy would provide forest management guidelines for all Virginia state agencies with forest-related responsibilities and would provide guidelines to the private sector regarding acceptable and unacceptable forest practices. The new policy should have broad public support and legitimacy because all stakeholders would be intimately involved in the process from the beginning.

A comprehensive state forest policy must make economic sense to non-industrial private forest landowners that own the bulk of Virginia's forests. Aldo Leopold in his book, A Sand County Almanac, recognizes the importance of economic considerations in land use policy: Examine each question in terms of what is ethically and esthetically right, as well as what is economically expedient. A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise. It of course goes without saying that economic feasibility limits the tether of what can or cannot be done for the land. It always has and it always will.¹³

Leopold's management goal of a stable biotic community has lost its scientific appeal with the demise of the balance of nature doctrine, but his insistence that land-use policy must be economically feasible remains as true today as it did when he stated it half a century ago. To say that economics is not all that matters is not to say that economics does not matter at all. A forest policy that is economically feasible is likely to have a better chance of gaining the support of private forest owners than one based on biological principles alone.

In conclusion, the wood chip conflict will be useful if it serves as a wake-up call for the need for a modern, comprehensive forest policy designed to promote sustainable forestry for all important forest uses and to ensure that the state's forests will continue to benefit current and future generations of Virginians. The commonwealth has the opportunity to develop a forward-looking forest policy, one that could set a standard for other states to follow. Within the darkened shade of the new southern forests, nature itself is reknitting the disrupted patterns of the past. Deer trails that criss-cross ancient cotton rows beneath the pines reflect the progress of retrieval of the land. The gobbling of wild turkey in distant woods at the first race of dawn and the barking of squirrels among hardwoods hail the restored relationship of wildlife to the southern woods. Of far deeper practical and spiritual meaning is the fact that the human beings who control the fate of the land itself have become far more understanding and responsible and respectful stewards in the management of the South's most substantial heritage, its forests."¹⁴

Author's acknowledgment: I am grateful to Harold E. Burkhart for helpful comments and suggestions on an earlier version of this paper; I, of course, am solely responsible for its contents.

Endnotes

1 Bill McKibben, "An Explosion of Green," The Atlantic Monthly, (April 1995), pp. 63-64.
2 Douglas MacCleery, forest scientist, U. S. Forest Service, as quoted in McKibben, p. 63.
3 McKibben, pp. 61-83.
4 McKibben, p. 63.
5 Michael Williams, Americans and Their Forests, A Historical Geography, London: Cambridge University Press, (1989), p. 490.
6 Williams, p. 490.
7 Kathy Still, "Residents, Loggers Clash in Dickenson: Water Problems Appear to be the Issue," The Richmond Times Dispatch, October 28, 1999, p. B4.
8 David Demeritt, "Ecology, Objectivity and Critique in Writings on Nature and Human Societies," Journal of Historical Geography, 20 (1994), pp. 22-37.
9 Charles E. Lindblom and Edward J. Woodhouse, The Policy-Making Process, Englewood Cliffs, N.J.: Prentice Hall, Inc., (3rd ed., 1993), p. 7.
10 Ron Nixon, "New Pollution Rules Could Make Loggers Get Discharge Permits," The Roanoke Times, December 9, 1999, p. B3.
11 Department of Environmental Protection, New York City's Water Supply System, City of New York, available at www.ci.nyc.ny.us/html/dep/html/agreement.
12 Timberg, Craig, "To Save Land, Virginia May Buy It," The Washington Post, December 12, 1999, p. C1.
13 Leopold, Aldo, A Sand County Almanac, New York: Ballantine Books, (1949, 1966 pocketbook version), p. 262 (Emphasis added).
14 Clark, Thomas, D. The Greening of the South, Lexington, Ky.: The University of Kentucky Press, (1984), p. 147.


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Harold W. Wisdom is a professor of forest economics and policy at Virginia Tech. He has conducted an economic analysis of Virginia's hardwood resource, researched the competitive structure of forest products trade, and examined foreign exchange rates for wood products exports. He has served as associate editor of Forest Science and as a research scholar for the International Institute for Applied Systems Analysis in Austria, where he worked with a team of international scientists to develop a computer model of the world forest sector.