From the Redwood Forests

An unusual alliance of environmentalists, free-market economists, and conservative budget-cutters has emerged to oppose timber sales from federal forest lands. "Part of the problem is that the logging roads and cutting scar the forest," says Wilderness Society spokesman Richard Rice. "But on top of that, in most national forests these sales actually lose the government money."

A recent U.S. Forest Service report concluded that its logging program generates a profit. But a financial breakdown shows that the profit actually comes from sales in only a handful of forests. In 68 of the 123 forests studied, logging costs exceed revenue.

The study found that the government usually makes money from timber sales in the Pacific Coast states and the Southwest. But forests in the rest of the country run up big deficits—some $90 million annually. In Virginia's Jefferson National Forest, for instance, the government takes in only 18 cents for every dollar it spends.

These numbers have prompted critics to urge major reforms in Forest Service logging programs. "One of the most obvious changes is just to stop selling timber in these forests where the government loses money on every sale," economist Randal O'Toole told the Washington Post.

Economist Terry Anderson of Montana State University notes that the Forest Service has a strong incentive to continue logging, because that is its only source of income. "As it is now, the Forest Service gets nothing for preserving wilderness, and it can't develop other commercial uses for the land. If the Forest Service could lease land for dirt-biking, backpacking, and hunting, it could lead to a more efficient use of the land. Of course, the Forest Service might offer these services below costs, too."

In the long run, Anderson believes that the best solution is to privatize Forest Service lands. Currently, that idea has little support from environmentalists. But Anderson believes that "as environmentalists come to recognize the environmental and economic atrocities committed by government, they may be more supportive of some type of privatization."