In a recent opinion editorial in the Idaho County Free Press, Jim Chmelik, makes the strong case that Idaho needs to take control of its public lands. This call echoes the concern we raised in our inaugural post, the Post Scarcity Mindset, that federal management of hundreds of thousands of square miles of land leads to contrived scarcity of resources. He recognizes the contrived scarcity that results from federal management of these lands, and the residents of Idaho are certainly the poorer for this. Idaho is largely owned by the federal government as 70% of its land is public land. If you divide the GDP of Idaho by the number of square miles in the state, you find that the state produces $655.71 of GDP for every square mile. You can compare this figure to the state of Texas, where the federal government owns 4.2% of the land in the state. Texas is able to generate $4,899.06 of GDP per square mile. By these calculations, the residents of Texas are able to enjoy 8x more wealth, prosperity, and abundance because they are better able to manage the resources beneath their feet. It is not surprising that when you measure GDP per square mile that Idaho is one of the poorest states in the nation.
Chmelik includes a poignant example of how mismanagement of Idaho’s timber resources has resulted in the squandering of wealth and the destruction of pristine wilderness and wildlife habitat:
The recent wildfire season gives us some idea of the amount of productive revenue burned up through federal management. In the state as reported on the FS incident website 932,575 acres burned in Idaho; 246,000 burned in Idaho County or 26 percent of the total for the entire state. Total fire suppression cost in Idaho County alone was $52,000,000. A conservative estimate of timber burned in Idaho County is 1.23 billion board feet; at a value of $300 per thousand that amounts to $369,000,000 in lost revenue to our region. If we operated under the traditional 25 percent model one could say the county lost $92,250,000 in potential revenue. These numbers do not even represent the critical loss of wildlife habit, the destruction of our wildlife with an estimated 738,000 fatalities to our animal friends, nor the estimated 12.3 million tons of greenhouse gases released into the atmosphere. Why are we allowing this to happen to our environment and our way of life?
One could argue that the forests would still burn if they were managed locally, and that the local governments wouldn’t have the resources to protect the forests. It is clear from Chmelik’s numbers that this argument is problematic. Even if the fire season was as severe as the 2012 season, it would cost $52,000,000. If the county were to utilize the resources, they would generate $92,250,000 in revenue. This is a lot of money that can entirely cover the cost of fire suppression. I also suspect that the fiscal situation of Idaho county is a little stronger than that of the federal government, which means they would get more fire suppression bang for their buck. It is also likely that the fire seasons wouldn’t be nearly as severe if the timber resources were extracted more efficiently to prevent the dangerous fuel build-up. Also, if you read Rajiv’s post about Climate Corp, it is clear that big data is taking the risk management markets to vastly efficient new levels. It is likely that the County would be able to partner with a company like Climate Corp to provide fire insurance for the forests of Idaho, as long as they are managed to the risk management standards of the insurance company, which would make protecting and utilizing the resources vastly more affordable.
Finally, somehow states like Massachusetts are able to protect themselves against natural disasters, which is probably because the 94%-privately-owned state is able to generate $45,715 in GDP per square mile. There is a lot of wealth that can be used to manage, utilize, and protect all that private property. If you are doing the math, a state like Massachusetts generates 69x more wealth per square mile than Idaho.