Recovery Plan for the Northern Spotted Owl - DRAFT

foregone and the way they will save costs by not preparing for timber sales onthe reserved lands.Private timber producers also would benefit from receiving a higher price onthe timber they would harvest even if there is no owl conservation. In FigureH. 11, this is represented by Area C equal to (Pf - P,) x (Ql -Qfd + Q'). As is thecase for federal timber, this gain is offset by losses to timber consumers.Private producers would also harvest at a higher rate in the case with federalowl habitat conservation in response to the higher price, Pr The additionalharvest is shown in Figure H. 11 as (Qf -Q,). This harvest is achieved at highercost, however, as represented by the area under the supply curve, Sf from Q, toQf. The profit on this additional production is relatively small because of itshigh cost. It is equal to the area representing the additional revenues, Pox (Q. -Q 1 ) less the area representing the additional costs. The profit on the additionalprivate production is shown in Figure H. 11 as the small triangular Area Dunder price line Pf but above Sf between Q, and Qf.Although both the federal government and private timber owners benefit fromthe price increase, consumers of timber, such as sawmills and plywood mills,lose. To determine the total effect on the economy, we must estimate theeffects on timber consumers as well as producers. Mills lose because thehigher price of logs that results if timber harvest on federal lands is restrictedby protection of owl habitat causes lower profits.The graphic analysis of the effects on timber consumers is shown in FigureH. 12. If there were no owl conservation, the timber buyers' benefits are representedby the roughly triangular area with corners at PO, Id and E 0 . If owlconservation restricts timber supply, the timber buyers' benefits are representedby the roughly triangular area with corners at P., Id and E,. The lossesexperienced by timber buyers are represented by the difference between thetwo triangles, shown as Area E.IDa).0Eo tS Sa)C-,TPtP 0Q1 Qfd QI Q~ QORate of timber harvest.11111 .........- I " Ill ., I I......... - IFigure H.12. Price-induced losses in benefitsfrom milfing.568