Sound economic analysis made me a tree-hugger

Over a decade ago I wrote a paper (‘Forest Rotation and Streamflow Benefits’, Australian Journal of Forestry, 1994) that looked at optimizing the total water supply plus timber benefits from logging in a water catchment – specifically the Thomson River catchment.

When trees are of intermediate size and growing fast they cut into water yields simply because they drink a lot. When they are small their small absolute size means that their drinking has little effect while when they are old they don’t drink much because they are not growing quickly.
Thus if you are thinking about harvesting trees you want to avoid having forest stands that lie in an intermediate age group. Either cut them very young or leave them alone and don’t cut them at all to gain sustained water supply benefits. (I always enjoyed obtaining this result just by drawing a few graphs using Excel and tree growth-water yield data – the optimization task itself is a complicated, non-concave problem so drawing graphs turns out to be the simplest and best approach). Generally I favored not logging at all in the Thomson.

According to The Sunday Age this morning the solution I suggested seems right.

‘MELBOURNE is losing out on a million litres of drinking water every year [as reader ChrisL points out this is a ludicrously low, presumably a typo] from continued logging in the city's main catchment area. And it comes at a cost to the taxpayer of at least $147 million — the difference between the royalties paid by the logging industry to the State Government and the value of the lost water, according to economic consultants commissioned by Melbourne Water.
As the city heads towards stringent stage 4 restrictions, a host of scientific studies indicate the Thomson Dam, which supplies about 60 % of Melbourne's water, is losing up to half the potential run-off in the highest rainfall area owing to effects of logging……
It is estimated that if logging was stopped, water yields in the catchment would increase by 20,000 megalitres within two decades.
Despite the existence of studies dating to the 1950s, in 2004 the Bracks Government decided to conduct more research into the reduced water yields
caused by logging. It is scheduled to be completed in May 2008.
All the scientists spoken to by The Sunday Age questioned the need for further studies, saying the numerous existing reports, many of which were commissioned by the Kennett and Bracks governments and on which this article is based, were sufficient’.

Of course the Bracks Government seeks further studies because it is fearful of the electoral implications of giving the forest industry a well-deserved kick in the rear-end. In the meantime we continue to face costly water restrictions, lose beautiful forests of mountain ash and other species and pay a huge implied subsidy to the forestry industry.