Atmospheric deposition and forest decline

This paper discusses the economic implications of alternative scientific explanations of observed forest decline. The various explanations can be grouped into two categories. One category posits direct damage to the forest canopy that is reversible. The other category posits indirect damage via soil quality changes that may be irreversible or slow to recover. The paper argues that the decision maker should take into account all of the explanations in designing a control strategy for acid deposition. It would be costly to wait until a single explanation has emerged victorious. If the irreversible decline explanation turns out to be correct, the forest damages will already have been sustained with no recovery possible. Assuming that the impact of acid deposition is to reduce forest productivity by 5% per annum then the annual losses to the commercial timber industry in Canada is estimated to be $197 million ( in 1981 dollars). To this an annual loss of $1.29 billion (in 1981 dollars) should be added for disruption to recreation and wildlife habitat values.