Rather than representing barriers to the Pacific Northwest’s economic development, environmental regulations are crucial to the region’s economic vitality.
That’s the conclusion of a report called “Economic Well-Being and Environmental Protection in the Pacific Northwest” issued Wednesday by 34 economists who represent most of the major universities in the region.
The decline of the region’s natural resources-based industries - timber, mining, fishing and agriculture - has not occurred because of environmental regulation, the report emphasizes.
Rather that decline has occurred because of global market conditions that are beyond the ability of this or any other region to control.
“Political forces, even powerful special interests, cannot bring back the economy of a past era,” the report concludes. “The unique natural resources of the Pacific Northwest remain among its most important economic assets. But the new jobs and income that are vital to the region’s economic future will depend more on the protection of those assets than their degradation.”
The report was presented by economists at six locations, from Missoula to Eugene, Ore. Thomas Power, an economist with the University of Montana, was in Spokane to discuss the report.
He said it came about because economists throughout the region were concerned about “a bizarre element” in many recent discussions of the region’s economy.
Although by all measures the Pacific Northwest has dramatically outperformed the rest of the nation over the past five years, these economists have found the public perception is “heavily tinged by a doom-and-gloom depiction and prognosis.”
The perception, Power said, is that with mills and mines closing, agriculture suffering declines and the aerospace industry laying off thousands of workers, the Northwest’s economic base is collapsing.
“The obvious cause was seen by some as being environmental regulation that had run amok and was strangling our traditional economic base,” Power said. “The cure being suggested was to sweep away suffocating environmental regulation and re-energize our traditional extractive industries.
“To many economists in the region, this was both an inaccurate diagnosis and a dangerous, misdirected cure.”
The facts are, Power said, that the economy is booming, and the shrinking of employment in the extractive industries will continue to occur because they are mature industries forced to become more efficient and pay lower salaries to fewer people if they are to continue to survive in a global economy.
And despite all the layoffs, Power added, overall employment in the region has grown since 1990. And the lost jobs have been replaced by higher-salaried jobs, in many cases, that are dependent upon the region’s quality of life.
Concerned that public policy is being based on the misconceptions about the Northwest economy, the economists began working on the study last summer. They obtained funding from the Pacific Rivers Council, an environmental group that focuses on water quality.
The study comes to the conclusion that now, the trees are worth more in the ground in many cases than they are in a sawmill.
The region has maintained its economic vitality in spite of the downsizing of its traditional economic base industries, the study says, because of in-migration. A lot of people have moved here during the past five years, bringing with them business and investment that creates new jobs.
The new global economic realities are that much business and industry is no longer tied to geographical location. Therefore, many businesses can afford to be where they and their workers wish to be. They wish to be where the quality of life is high. So quality of life - of which environmental quality is a major factor - takes on greater economic value than it ever has before.
“If the region can protect what is unique and attractive about itself, it should enjoy continued economic vitality,” the report says. “If, however, the region’s livability is seriously damaged, then this vitality and prosperity may be endangered.”
In many cases, the report says, extraction has become a lower-value use of resources. But economic growth best occurs when resources are assigned uses that reflect their highest value.
“In many instances,” the report states, “the highest-value use of a forest, river, or other resources will be to protect and enhance it so that it reinforces the region’s natural environment, because doing so will strengthen one set of forces that is creating new jobs and higher incomes.”
Rebecca Mack, executive director of the Northwest Natural Resources Institute based in Spokane, had not seen a copy of the study Wednesday, but she said the industries she represents do not see commodity-based industry as being incompatible with a quality environment.
“We just have to strike the right balance,” she said, “and the region is struggling mightily to find that balance.
“But I don’t think this region is ready to shift completely away from a natural resources-based economy.”
Ken Kohli, representing the Intermountain Forest Industry Association, echoed Mack’s observation, and argued that the environmentalindustry interests have been kept in balance.
“We don’t see the region leaving natural resource-based industries behind,” Kohli said. “The thing I find interesting is that we are seeing a tremendous amount of economic growth in our region after we have been very dependent on natural resource industries for 100 years.
“That underscores the fact that with good stewardship, these industries can manage natural resources and still provide quality of life and an outdoor environment that people still find desirable.”
In their report, the economists agree that agriculture, timber, fishing and mining will continue to be important parts of the regional economy. They stress, though, that those industries will never again be the driving force they once were, and that public policy approaches to future environmental regulation should not be based on the hope that the economic clock can be turned back to an era when they were.
“Environmental quality has important economic value that has to be kept in mind as we make these difficult choices in the future,” Power said. “All these economists are saying is that you must ask the right questions in the right way.”