21. Reforming the Forest Service

Sometime in 1986, an editor from Island Press called me to see if I would write a book for them. A non-profit book publisher, Island Press was created in 1984 to focus on environmental issues. It relied on grants and donations to fund about half of its operation so it could publish books that might not have a huge audience. Drummond Pike, the Shalan Foundation director who helped us start Forest Planning magazine, was one of its early supporters and referred them to me.

I agreed to write a book, but book writing turned out to be hard. I had written enough 5,000- to 10,000-word reports that I could imagine a report outline in my head and just start writing. But most books are around 100,000 words, and it was hard to conceive of something that big all at once. Even now, six books later (plus three or four that were never published), I have to worry that I’ll repeat something in chapter 9 that I already wrote in chapter 4.

In the fall of 1986, writer Bill McKibben asked if I could give him a tour of old-growth forests in southwestern Oregon, which had been made famous by Earth First! blockades of road construction. I gave him my pitch about the incentives created by the Knutson-Vandenberg Act, which — based on what he has written since then — made absolutely no impression on him at all.

Unfortunately, during a hike in the woods near the Old Shade Place, I stepped up on a log and heard something in my back go pop. Suddenly I was in the worst pain I had ever felt, as if someone was stabbing my spine and turning the knife.

With McKibben’s help, I hobbled back to the car and lay in the back as he and Vickie drove me to Eugene. We stopped at a doctor’s office along the way but the doctor offered no help other than prescribing bed rest. With no insurance and almost no savings, I elected to spend the next couple of months in bed rather than try to get hospital care.

While I’d never want to go through that again, this gave me the opportunity to think about a book. With a Macintosh at my bedside and a keyboard in my lap, I tapped out the first draft of Reforming the Forest Service.

I had been talking and writing about the Knutson-Vandenberg Act for a couple of years, but this book went much further than merely suggesting that the K-V and similar laws be repealed. The many Political Economy Research Center meetings I had attended had convinced me that markets were better than politics for managing resources, even or especially if they were owned by the public. If Congress would take away the incentive to do bad things such as lose money on environmentally destructive timber sales, what kind of incentives could it create to do good things such as protect wildlife habitat, water quality, and roadless recreation?

One of the speakers at some of the PERC conferences I attended was a wildlife biologist who worked for International Paper in the Southeastern United States. He had set up programs allowing hunters and other recreationists to use company forests in exchange for user fees. The user fees proved significant enough that the company voluntarily reduced the size of its clearcuts, left large no-cut buffer strips along streams, and left several acres of uncut timber around nests of the endangered red-cockaded woodpecker.

When company foresters objected that the Fish & Wildlife Service only required them to leave the trees in which red-cockaded woodpecker nests were found, a vice-president told them, “Wildlife and recreation are bringing in a third of our profits, so if the wildlife biologists want to protect several acres of trees, we’ll do so.”

Timber companies in the West rarely had such user-fee programs because they would have had to compete with free recreation on national forests, which are much more extensive than they are in the Southeast. However, another speaker at PERC conferences was the manager of Utah’s Deseret Ranch. The ranch had been losing money as a cattle operation, so he began to emphasize elk and pronghorns. The ranch still grew cattle, but also charged user fees to hunt, with the highest fees collected for trophy animals. The result is the ranch became profitable and its environmental standards were much higher.

I had once believed that the Forest Service wouldn’t be able to charge user fees for dispersed recreation national forests (unlike national parks) have too many entrances and the density of recreationists — which might be as low as one person for every few hundred acres — couldn’t justify the costs of enforcement. But the International Paper and Deseret Ranch examples showed that the enforcement issue was exaggerated. Visible permits displayed as parking stickers or tags hanging from clothes were already used in many places such as downhill ski areas.

Moreover, if recreationists understood that the fees they paid led to better forest experiences, they would be somewhat self-enforcing. In fact, just as people walk around in winter wearing a ski-lift tag on their parka to advertise that they are athletic, some people would buy national forest recreation permits even if they only rarely used them just for the cache of saying they had one.

Another PERC conference was attended by Bill Niskanen, who had been chair of Ronald Reagan’s council of economic advisors and later became chair of the Cato Institute. At six feet four inches tall, Niskanen was quite intimidating. I recall one evening at dinner being entertained by Walkin’ Jim Stolz, a songwriter who had hiked across the country and from Mexico to Canada several times. At one point, Walkin’ Jim asked everyone to join hands while singing along with him, and Niskanen’s hand seemed gigantic compared with mine.

I went home and found a book by Niskanen called Bureaucracy and Representative Government in which he suggested that the main motivation for government agencies was to maximize their budgets. This didn’t mean that bureaucrats were corrupt or even that they consciously made decisions that increased their budgets. Instead, through a process similar to natural selection, the bureaucrats who sincerely believed in policies that happened to increase their agencies’ budgets tended to get promoted, while those who supported policies that would reduce the budgets were left behind. The result was that, eventually, most people in the bureaucracy strongly supported policies that just happened to increase their budgets. This fit everything I knew about the Forest Service.

I divided Reforming the Forest Service into three sections with five chapters each. The first section, which I called “Symptoms,” looked at national forest issues: overcutting, too much clearcutting, below-cost timber sales, destruction of roadless areas, and so forth. The second section, which I called “Diagnosis,” showed how an assumption that the agency was trying to maximize its budget explained all of these problems. The third section, called “Cure,” proposed to reform the Forest Service by cutting off all federal subsidies to the national forests and allowing the forests to fund themselves out of a full range of user fees, including fees for all forms of recreation.

A year before my book came out, the University of Kansas published Timber and the Forest Service by David Clary, who had worked for a time as official historian for the Forest Service. His thesis was that Forest Service officials thought of themselves as being on “a crusade to bring wood to the world to avert the evils of a timber famine.” Reforming the Forest Service had an entirely different view, holding that the Forest Service emphasized timber only because timber produced greater budgetary rewards than any other resource. If the agency could be redesigned to produce similar rewards from recreation, then it would emphasize recreation instead.

So I proposed that the forests be allowed to charge fees at fair market value for all resources and that they be funded exclusively out of a specific share of the profits they earned from those fees. In fact, I proposed to give them 100 percent of the profits they earned in the previous year. That perplexed some people, but it simply meant that forests would have to earn twice their costs to sustain their budgets. I supposed I could have proposed to fund them out of half their gross receipts and accomplished a similar result, but I wanted to emphasize that there is a difference between profit maximization and revenue maximization.

To protect wilderness, I proposed the creation of Wilderness Trusts that would take user fees collected from wilderness users and use them to manage the wilderness. If revenues were sufficient, some of the fees could be used to expand the wilderness by buying timber cutting rights and other rights on other federal lands. As the Forest Service then existing, environmentalists could “save” an area by outbidding timber companies for a timber sale, but if they didn’t cut it within the prescribed time the Forest Service would just sell the timber to someone else, mainly because the Forest Service earned so much in K-V and other funds after the trees were cut. As I proposed it, the Forest Service would just be interested in earning revenue and indifferent to whether the people who paid for timber actually cut it or not.

Having endured more than a decade of national forest planning, I realized that government planning only promoted polarization, while markets encouraged cooperation. So I proposed to repeal the Resources Planning Act and National Forest Management Act and to exempt the forests from the National Environmental Policy Act. The forests would still have to comply with more substantive laws such as the Clean Water Act.

I hadn’t studied the Endangered Species Act in detail, so I simply proposed that endangered species be managed by “scientists.” When Jerry Franklin heard that proposal, he exclaimed, “Don’t let the scientists decide. They’re the worst!” By that he meant they were most susceptible to budget maximization incentives. Several years later he proved that when President Clinton turned planning for old-growth forests over to him and three other scientists. Shortly after that, I did study the Endangered Species Act in detail and came up with some specific proposals to make it work better with less controversy.

In the meantime, the proposals in Reforming the Forest Service were radical enough that I initially kept them secret from most of my friends, including those in the Oregon Wilderness Coalition. Everyone on CHEC’s staff knew what the book was going to say because we proposed to save Island Press some money by doing the layout of the book ourselves in Pagemaker, and the staff helped to proof read it.

To present the book to the public, I made a slide show to explain my reasoning. This was long before the days of PowerPoint, but I made brightly colored charts with Excel and Adobe Illustrator, printed them out, and photographed them with slide film. Combined with photos of national forests and CHEC staff members wearing imaginary recreation tags, this made for a nice 80-slide slide show.

Shortly before the book came out, I gave previews to OWC staff and other close friends, including Sherry Wellborn, who had edited the first Forest Planning that was done in Pagemaker. Sherry is a wonderful person but is a little more swayed by emotion than by science. So I was relieved when she said, in response to my presentation, “So what you are saying is that Forest Service employees are human just like everyone else.”

Indeed, we had so long engaged in rhetoric portraying the Forest Service as evil, or at least in the pockets of the timber industry, that my new view was something of a shock. The Forest Service was no more in industry pockets than Monteith and Kerr. Instead, they were just victims of poorly designed incentives that rewarded them for losing money on environmentally destructive activities.

Although copyrighted 1988, the book actually came out in late 1987. I immediately went on the road to sell the book and its ideas to the people I had been working for over the previous decade. I gave presentations to large groups of people in such places as Quincy and Nevada City, California; Missoula, Montana; Portland, Oregon; and Salt Lake City, Utah.

When I presented at the annual conference of the Oregon Wilderness Coalition (by then renamed Oregon Natural Resources Council), I spoke in a break-out group. Later, the people who were giving presentations in other break-out groups complained that no one went to their presentations because they all wanted to hear what I had to say.

Andy Kerr introduced me by suggesting that people should buy my book, read the first half (he meant two-thirds), and throw out the last half (or third). In other words, he liked the diagnosis but didn’t like the proposed cure.

Of course, many people were suspicious of using markets to solve public land controversies because there was no guarantee that the market solution would be the one they wanted. Moreover, people believed that public officials should automatically “do the right thing,” which in their minds was to produce the things they wanted and not produce the things that competed with what they wanted.

Why should people have to pay to use wilderness when the environmental impact of wilderness users was negligible compared with the impact of logging, grazing, or mining? My response was that user fees create incentives, and if fees are proportional to environmental impact, then the incentives will be to encourage land managers to emphasize the uses that have the greatest environmental impact.

The Wilderness Society, which had at least two economists on staff and was run by someone who studied at the London School of Economics, agreed, and testified before Congress that it supported recreation fees. But the Sierra Club strongly resisted the idea that its members should have to pay for dispersed recreation (as opposed to developed campgrounds) on the national forests.

“If people want a certain type of recreation to be free,” I said, “they can probably get it, but it will be of low quality and there won’t be very much of it.” I believe that subsequent events have proven this to be correct.

One thing I was certain of: so long as the Knutson-Vandenberg Act and similar laws remained on the books, the Forest Service would never be able to reform itself. Substantive improvements in national forest management would come about only if Congress repealed those laws and replaced them with laws creating better incentives. In that, I was proven wrong.