246
the assimilative capacity of the environment. Unfortunately, environmental assimilative capacity is
very difficult to measure. In the long run, healthy
environments are generally associated with healthy
economies.
Ideally, all linkages of the economic system from
and to the environment should be quantified in
models (see Chapter 21). The reality is that "less
than ideal" is likely to be the case for some time,
although theoretical models can account for all
linkages. We will consider both ideal and realistic
analytical approaches.
17.1.2 Structure of the
Regional Economy
Regional economic structure is of major concern
when linking the economy with natural resources.
The structures of regional economies in the United
States vary a great deal, which means that appropriate natural resource policies (as well as those relating to industry and government) will also vary
from region to region. Some regions are well endowed with natural resources, whereas many are
not. Degree of industrialization varies much from
region to region, as does the amount of publicly
owned land. Even where natural resources are important contributors to the economic base, the
types, quantities, and qualities of natural resources
in the mix vary a great deal.
Measurement of regional economic structure is
neither straightforward nor standardized. However,
a simple way to look at it is to measure percentages of total income, employment, or output accounted by sectors consisting of establishments
having similar mixes of outputs of goods or services. We can then contrast these percentage distributions from one region to another. In regional
economics the economic base often is delineated
and includes those sectors that export most or all
of their outputs outside the region. Economic
growth is thought to depend on growth of these sectors, and the rest of the regional economy (Le., consisting of the nonbasic sectors) grows as basic sectors grow. Often resource sectors have been and
continue to be numbered among the basic sectors
of the economy. As these sectors expand, there is
a ripple effect, meaning that a more than proportionate growth occurs in the total regional economy. Of course, the ripple effect works in both directions, as a basic sector is contracted, there is a
greater than proportionate decrease in economic activity. This effect is one reason people in a region
become very concerned when policy changes reEconomic Linkages to Natural Resources
duce outputs in basic sectors (e.g., the Pacific
Northwest reductions in National Forest timber harvests).
17.1.3 Derived Demand for
Natural Resources and
Environmental Services
Most natural resources and environmental services are cases of derived demand. That is, final
consumers do not purchase them, but rather they
are producer goods and services (an exception
would be wilderness recreation). Demands for
timber, for example, depend on demands for
houses (for lumber and building board, etc.),
for various types of paper, and for recreation in
developed areas. This makes measurement of supply and demand equilibrium very difficult, because linkages between various stages of processing must be quantified correctly. Also, the analysis
can be seriously compromised if possible substitute inputs (e.g., different technology or sources)
are not considered. This has been an embarrassing problem among resource planners from the beginning of the professions-witness the prophets
of doom regarding the long-run economic availability of timber, coal and petroleum at various
times in the nation's history.
Natural resources are linked to the economy
through intermediate (i.e., primary and secondary)
economic sectors. Establishments in these sectors
process natural resource commodities (e.g., timber,
forage, water) or, in a few unique cases, sell natural
resource services directly to [mal consumers. To
comprehensively quantify contributions of natural
resources to the economy, it is necessary to measure transactions between natural resource sectors
and intermediate sectors of the regional economy.
The linkages of the economy to natural resources
are very complex and difficult to quantify. For example, the greatest demand for timber products
comes from the sectors of lumber and wood products, wood furniture and fixtures, pulp and paper
products, and Christmas trees and greens. Other
sectors that also use wood in significant amounts
include (McKeever and Hatfield, 1984) ship building and repair; boat building and repair; travel trailers and campers; musical instruments; games, toys,
and children's vehicles, except dolls and bicycles;
sporting and athletic goods, not elsewhere classified; brooms and brushes; signs and advertising displays; and burial caskets. Similar detailed linkages
exist for other types of natural resource areas (e.g.,
rangelands, wetlands, recreational areas).
the assimilative capacity of the environment. Unfortunately, environmental assimilative capacity is
very difficult to measure. In the long run, healthy
environments are generally associated with healthy
economies.
Ideally, all linkages of the economic system from
and to the environment should be quantified in
models (see Chapter 21). The reality is that "less
than ideal" is likely to be the case for some time,
although theoretical models can account for all
linkages. We will consider both ideal and realistic
analytical approaches.
17.1.2 Structure of the
Regional Economy
Regional economic structure is of major concern
when linking the economy with natural resources.
The structures of regional economies in the United
States vary a great deal, which means that appropriate natural resource policies (as well as those relating to industry and government) will also vary
from region to region. Some regions are well endowed with natural resources, whereas many are
not. Degree of industrialization varies much from
region to region, as does the amount of publicly
owned land. Even where natural resources are important contributors to the economic base, the
types, quantities, and qualities of natural resources
in the mix vary a great deal.
Measurement of regional economic structure is
neither straightforward nor standardized. However,
a simple way to look at it is to measure percentages of total income, employment, or output accounted by sectors consisting of establishments
having similar mixes of outputs of goods or services. We can then contrast these percentage distributions from one region to another. In regional
economics the economic base often is delineated
and includes those sectors that export most or all
of their outputs outside the region. Economic
growth is thought to depend on growth of these sectors, and the rest of the regional economy (Le., consisting of the nonbasic sectors) grows as basic sectors grow. Often resource sectors have been and
continue to be numbered among the basic sectors
of the economy. As these sectors expand, there is
a ripple effect, meaning that a more than proportionate growth occurs in the total regional economy. Of course, the ripple effect works in both directions, as a basic sector is contracted, there is a
greater than proportionate decrease in economic activity. This effect is one reason people in a region
become very concerned when policy changes reEconomic Linkages to Natural Resources
duce outputs in basic sectors (e.g., the Pacific
Northwest reductions in National Forest timber harvests).
17.1.3 Derived Demand for
Natural Resources and
Environmental Services
Most natural resources and environmental services are cases of derived demand. That is, final
consumers do not purchase them, but rather they
are producer goods and services (an exception
would be wilderness recreation). Demands for
timber, for example, depend on demands for
houses (for lumber and building board, etc.),
for various types of paper, and for recreation in
developed areas. This makes measurement of supply and demand equilibrium very difficult, because linkages between various stages of processing must be quantified correctly. Also, the analysis
can be seriously compromised if possible substitute inputs (e.g., different technology or sources)
are not considered. This has been an embarrassing problem among resource planners from the beginning of the professions-witness the prophets
of doom regarding the long-run economic availability of timber, coal and petroleum at various
times in the nation's history.
Natural resources are linked to the economy
through intermediate (i.e., primary and secondary)
economic sectors. Establishments in these sectors
process natural resource commodities (e.g., timber,
forage, water) or, in a few unique cases, sell natural
resource services directly to [mal consumers. To
comprehensively quantify contributions of natural
resources to the economy, it is necessary to measure transactions between natural resource sectors
and intermediate sectors of the regional economy.
The linkages of the economy to natural resources
are very complex and difficult to quantify. For example, the greatest demand for timber products
comes from the sectors of lumber and wood products, wood furniture and fixtures, pulp and paper
products, and Christmas trees and greens. Other
sectors that also use wood in significant amounts
include (McKeever and Hatfield, 1984) ship building and repair; boat building and repair; travel trailers and campers; musical instruments; games, toys,
and children's vehicles, except dolls and bicycles;
sporting and athletic goods, not elsewhere classified; brooms and brushes; signs and advertising displays; and burial caskets. Similar detailed linkages
exist for other types of natural resource areas (e.g.,
rangelands, wetlands, recreational areas).