Wednesday, December 27, 2006

Plum Creek's economic benefits: a closer reading

This past weekend, the Maine Sunday Telegram published an op-ed column I'd written about the economic benefits of Plum Creek's plan for the Moosehead region. The article is reprinted in full here at the Natural Resources Council of Maine webpage.

The Telegram gave it the misleading headline "Plan no benefit to region's economy." I argued that the plan does provide some much-needed economic benefits to the region; however, most of those benefits come from investments in the region's forest and tourist industries. The most controversial aspects of the plan - the hundreds of houselots scattered across the wilderness - would contribute little, and might actually detract from, the region's economy.

The graph below shows the expected income, in thousands of dollars, from residential development of house lots compared with expected income from one industrial forest products facility (source: Dr. Charles Colgan, "Estimated Economic Impacts...", 2006):

Note how income from hundreds of house lots plunges to zero after peaking in 2015, while the income from one sawmill rises and exceeds construction income every year. Also, though Colgan doesn't break it down by individual counties, it's widely expected that most of the construction income from residential development will go to construction firms and workers from outside of the Moosehead region (mostly in Bangor, in Penobscot County). The bulk of industrial income, on the other hand, will go to long-term employees living within a feasible commuting distance of the mill, which is proposed to go on the road between Greenville and Rockwood.

Then there's the fact that the sawmill will have fewer demands of municipal services than nine hundred seventy-five new houses. And all of those houselots are going to take thousands of acres of productive forest land out of production, off-limits to the much more lucrative businesses of forestry and recreation.

So yes, Plum Creek's plan does have some economic benefits. But those benefits would be a lot less ambiguous if the company stuck to the business of forestry and struck the wilderness housing developments from its proposal.


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Omar Cruz said...
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