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Mark Haggerty & Megan Lawson: The Economics of Public Lands and Rural Prosperity · The Wild Idea

• 0:00
  [instrumental music] Welcome to our continuing conversation for a wild and connected world, a conversation situated at the place where wild nature and human nature meet. I am one of your hosts. My name is Bill Hodge, and I am joined by Anders Reynolds for all of these explorations. We both appreciate all of you taking the time to download and listen to this episode and would love you to invite more to the party by sharing this or another favorite episode with at least a handful of your friends and colleagues. Today, we are joined by a couple of folks that think, research, and propose solutions around the economics of public lands. Mark Hagerty is a senior fellow on the Energy and Environment team at the Center for American Progress, with a reputation as a non-partisan expert committed to practical solutions. While Megan, Dr. Megan Lawson leads Headwaters Economics Research in outdoor recreation, economic development, and demographics. And she's got more than 20 years experience as a quantitative economist analyzing policies and trends for communities, governments, and non-profit organizations. Anders, this is gonna be a rich conversation, I have no doubt.
• 1:09
  Oh, hi, Bill. Yeah, I'm really, really, really excited for this one. Um, Bill, we've both been traveling a lot. I haven't seen you since, um, I flew to the East Coast and, um, then to Denver, and now I'm back at home. But you're still on the r-- you were on the road before I took those trips, and you're still on the road. What are you up to out there?
• 1:32
  Uh, still on the road, yeah, absolutely, uh, in, uh, Anacortes, Washington with our executive producer and my lovely bride, Laura. Um, been having a great time. Um, this is such a beautiful part of the world. We love it out here. It's why we spend some time out here. Uh, I was [chuckling] gonna tell you, we had a, had a kind of a weird experience, and it, oddly enough, the second time we've had this kind of experience. Even the second time we've had this experience in Washington, we
• 2:01
  kinda were out doing a little exploring, and we ended up in this little sort of coastal town in Coupeville,
• 2:08
  Washington on Whidbey Island. And we're like, "Well, let's, let's kinda check this town out." We sort of go into the downtown, and my gosh, it was,
• 2:17
  one, it was cute, quaint, whatever. I, I think I referred to it as quaint AF. Um, it is just a really, really [laughs] cool little downtown, but it was, like, hopping. It was, like, a Sunday afternoon at, like, 5:00, and I couldn't get over... And Laura and I were just like, we, we drove around for 20 minutes trying to find a place to park. And we're oblivious to why there's that many people, and, you know, just trying to figure it out. We finally get parked. Then we're noticing that, like, a lot of these shops have, like... I guess I would call it the occult or whatever. Finally, Laura, being the smart one, Googles it. Turns out Coupeville, Washington is where they filmed a movie back in the '90s called Practical Magic. And of course, now, as I understand it, Practical Magic 2 just now out in theaters, so there's, like, this rush for people returning to Coupeville, I'm assuming, or it's just like that every weekend. But that's the second time something like that has happened to us in Washington.
• 3:12
  The other time being Forks and, and the Twilight series, I assume, because I-
• 3:16
  Right. We- Yeah
• 3:16
  ... I've had that happen to me in Forks, where I start driving through and I, and I've said, "Why is everyone taking a picture by the Welcome to Forks sign? Why is everyone [chuckling] covered in glitter?" And then-
• 3:26
  [laughs]
• 3:26
  ... you pull out the phone and you realize, "Oh, there's a f- a fandom here, and I think I wanna just drive through the middle of town and get out as fast as I possibly can."
• 3:36
  Yeah, yeah, the Twilight fame of Forks, Washington. But now I know that there is a Practical Magic fame for Coupeville.
• 3:43
  I... Okay,
• 3:46
  it's September 22nd, um, which is,
• 3:50
  for my taste, a little too early to, to say that we're in spooky season. But the story you're telling me is spooky for a couple of reasons. So first, September 22nd is the anniversary
• 4:05
  of the day the last victims of the Salem witch trials were killed. So-
• 4:12
  Mm.
• 4:13
  ... ooh, that should send-
• 4:14
  Oh
• 4:15
  ... a shiver up your spine. But secondly, I mean, you know me, I'm a, I'm a movie buff. I'm a cinephile, but I had never seen Practical Magic until about three days ago when I watched it-
• 4:27
  Wow
• 4:28
  ... on the back of the seat in front of me on, like, a postage [laughs] stamp, like a, on a postage stamp-sized screen. Um,
• 4:39
  and I, I, I did it because I knew Practical Magic 2 was coming out, and I thought, "I gotta, I gotta be a part of, like, this whole witchy zeitgeist." And you know what? It, it held up better than I thought. The, the mid movies from the '90s are better than some of the best movies today. And-
• 4:57
  [laughs]
• 4:57
  ... you know, not to get all pop culture here, but it's amazing that there was a time, um, in our pop culture where Sandra Bullock was the obvious box office draw over Nicole Kidman. I don't think it would be that way today. I don't know. I, I haven't really been paying attention to the way this new one has been marketed, but maybe I should. The, the, the world seem to be, seems to be sending me a message, "Watch Practical Magic 2." Um-
• 5:19
  [laughs]
• 5:20
  ... and, you know, Warner Brothers, if you're listening, [laughs] we'll, we'll take the sponsorship. We're pushing this for free out here. Bill and I will put on witch hats today for the right price.
• 5:31
  Yes, we will. [laughs] We will do anything for the right, for the right price. You know, all the occult stuff there in Coupeville was interesting. At a, like, thrift store,
• 5:41
  I found a Ouija board. And when, sometime when you and I wind up back in Montana together, I'm coming to Missoula, and we're gonna tempt fate with the Ouija board. I don't know when that'll be, but we need to do that sometime.
• 5:55
  I'm totally in. I c- I cannot wait to do it.
• 5:58
  I think that, I think that gives us a good- Uh, transition to today's Anders challenge word. We still need to come up with what we're gonna call this, but-
• 6:06
  Yeah, this whole bit needs a name.
• 6:08
  It does. We- we've been-- I've been giving you what I would call classic, you know,
• 6:14
  ten dollars words that you love to use and then you enjoy when our guests use. And so I'm, I'm giving them to you now as a challenge. This-- So
• 6:23
  I think today's bit's on this sort of, like, spooky, occultish theme, right? So the word is that I wanna see you squeeze into today's conversation, which is just about economics, not about witches and, you know, practical magic. The word is psychopomp. I want you to squeeze in the word psychopomp.
• 6:40
  Psychopomp. Bill, I love it. I love a psychopomp. I know what a psychopomp is. I don't have to look this up. So in, in many religions, there's like a spirit or a guide that takes people to the afterworld when they die. Like, you could, you could think about, you know, a, a generic angel, um, in the Christian religion or like Anubis in like the, uh, Egyptian, um, spiritual tradition. Um, but I, I think it's, it's more interesting to me how it's changed over time to mean like any, any guide that takes like a mortal into the underworld and sometimes back. Um, and, you know, probably the most classic literary example is, is Virgil accompanying Dante into hell in the Divine Comedy. Um, so yeah, psych- psychopomp. This is a good one. And, you know, I, I think you're rushing spooky season a little bit, but it, it definitely fits the theme today. So I'm in.
• 7:34
  Oh, we're closing in on it. We're closing in on spooky season for sure.
• 7:38
  And Bill, I'm so grateful, uh, to you for playing Nicole Kidman to my Sandra Bullock. Thank you, buddy.
• 7:43
  [laughs] Always playing second fiddle, buddy. Always second fiddle. If you wanna follow-- Those of you familiar with Practical Magic, I guess I'm the drunk one who has run off and had to come back to, have, had to come back to the hometown. So, well, let's have this, uh, important conversation about the economics of public lands and the ways we move forward with Mark and Megan.
• 8:02
  Mark, Megan, thank you so much for joining us today. We're so happy to have you on the podcast. Um, Bill and I are both super curious, um, about a number of topics we're gonna bring up with you. So I'm, I'm happy to have the experts here to provide us with answers. I, I think I'd start off by just saying, you know, for a long time, the only economics that folks associated with public land were sort of the boom and bust economics of extractive industries like mining or oil and gas exploration.
• 8:34
  And the Conservation Alliance and other outdoor recreation groups have been able to, to change that narrative over time by talking about, for example, the purchasing power of outdoor gear or the jobs created by the outdoor industry. And your work, um, continues, I think, to, to sort of refine that narrative, that, that public lands are a net economic benefit. Um, how did each of you come to see economic analysis as a tool for protecting wild places rather than as an argument against protecting wild places?
• 9:09
  Um, I got interested in economics in high school, um, surprisingly. I actually took an economics class, which isn't,
• 9:17
  uh, often taught. And so I pursued it in college, and I really didn't know what I wanted to do with it, but it just overlapped with the fact that I was an outdoor kid. I spent all of my free time outside. As soon as I got the chance, I was fishing and biking and running all over public lands, um, and I just was able to find a way to put the two together, luckily, um, both at, at college and after college, moving to Bozeman, Montana, and really becoming a, a lover of public lands and found a way to apply my school to what I actually cared about, which, um, is a really wonderful thing to be able to do with your career.
• 9:58
  And I have a little bit, maybe the exact opposite, uh, origin story as Mark. Um, I took, uh, Econ 101 as a freshman in college and thought it was really boring and irrelevant. Um, and then my senior year, I was doing research on, uh... I was a conservation biology major, and I was doing research about a clear-cutting referendum in Maine. And I kept bumping up against this wall, like, that I didn't have the tools to answer the questions that I had, which was, how is this policy going to affect the people, um, who live next to these forests and depend on these forests? And my advisor told me that I was ac- asking economics questions, which was shocking. Um, but, uh, he suggested I go and talk to someone in the econ department, and I learned about the field of environmental and natural resource econ, and I've sort of been basically studying that, uh, ever since.
• 11:06
  Mark, when, when I heard you speak earlier this year about rural county contributions to GDP not translating to growing and thriving local economies, it, it really inspired us tracking down this conversation with you guys that we're having today. And the first question it inspired in me is, in the broadest sense,
• 11:25
  what are the numbers that, that matter? Do the numbers have to have a local hook to break us from what I perceive as, I guess I'll call it public land resentment among county elected officials, particularly in the West? Like, what's the numbers that we really need to focus on? Not only telling the story, I guess, nationally, but, like, to break through what I consider that resentment that exists at a sort of local county level?
• 11:48
  So the statistic that you're referring to is that seven of the ten counties that have the highest GDP per capita, so the counties that have, like, the largest economic output, right, are actually losing population at the same time. So something isn't working, right? Communities are producing a lot of value, they're producing a lot of resources, they're exporting a lot of commodities, and that's not translating into local prosperity. And, uh, I'll just ha- tip, that's a Headwaters Economics stat, so thanks to Megan and her colleagues. Um, but really what's behind it is that in a lot of natural resource sectors, whether it's oil and gas or agriculture or timber, we've seen so much productivity gains and automation in the way that those activities are pursued, is there really aren't that many jobs in it left. And the jobs that are there have had stagnant wages and declining benefits for decades. Um, and so the extractive industries that we tend to associate with rural communities and even with public lands have really changed in their structure and the kinds of benefits that they deliver to comm- to communities over the last, you know, couple of decades. Um, and so that's really what's happening in those places. And so that creates this feeling among communities that when new industry comes in, when new development projects come in, that it's really not for them, right? They're really not gonna benefit from it, that this is really geared towards investors. It's gonna benefit people somewhere else.
• 13:25
  So am I right that some of the loudest rural counties
• 13:30
  that... I'm just g- gonna sound really negative here, that really boohoo, uh, the, their, their lot in life when they're a county that is full of public lands. And for our, for our audience members that maybe don't know this, I mean, part of the issue becomes
• 13:49
  federal government does not pay taxes, uh, in the way that a homeowner would pay on their land. We have programs that sort of mitigate that, uh, you know, PILT, Payment in Lieu of Taxes program, or the Secure Rural Schools, that sort of thing. But am I right that some of the loudest rural counties are also the same ones that never planned for their future and only banked on those timber tax dollars as a way in which to fund the, the local services they provide? I mean, they scream for PILT, they scream, scream for SRS, but they also tend to really be, uh, negative about the benefits of being in a, in a place that has these incredible natural amenities.
• 14:28
  That is right in concept, but I don't actually blame the communities in a lot of ways. Um, states tend to set tax policy, and communities are often really restricted in how they're able to generate revenue from their own economy, what they're able to use that revenue for. So in Oregon, for example,
• 14:49
  the counties that have the BLM O&C lands and Forest Service lands that were really productive for timber, that were clear-cut through the '60s, '70s, and into the '80s, they did get tens of millions of dollars in some cases from the federal government. And when the Northwest Forest Plan came in and the timber management policies were changed, for good reason in a lot of cases, those revenues declined. But what had happened in the interim is Oregon had a tax rule. The state really restricted how properties could be assessed for property taxes. They limited the rates that counties were able to tax. So when that revenue went away from the federal government, communities weren't able to replace it. When a rural county in Oregon has economic development, say a, a manufacturing facility comes in or there's a recreation opportunity, they generally are not able to capture revenue from those new activities because of the sideboards, the handcuffs that are put on them by the state. Uh, and so yes, they're complaining. The easiest villain is the federal government. It's easier to say, "Pay us more," than to go to the state and try to change the constitution and raise your own taxes. So they are loud, but I actually have some sympathy for them. Like, they're, they're kind of getting it from all sides, uh, and providing basic services like public safety and schools and, uh, amenities to allow them to try to transition their economies is kind of the foundation of what those places need now to be resilient.
• 16:27
  Megan, I- I'm curious if in the research that Headwaters Economics has done, is there a dramatic difference between
• 16:35
  the economic public land perceptions broadly across America? Because in the East, I sense a clear community understanding of the thriving towns and cities that are adjacent to popular public land destinations. I'm thinking about Great Smoky Mountain National Park, wh- which I used to live close to. But those same folks don't live in a county that might be eighty percent federal land, like maybe somebody living in Nevada or Utah. Is, is there a dramatic difference east to west, Megan, or do you guys have data on something like that?
• 17:03
  That's a good question. Um,
• 17:06
  you know, we really haven't explored, like, the
• 17:09
  differences between east and west in terms of the economic contributions of public lands. Um, I mean, I think
• 17:18
  more along those lines,
• 17:20
  you know, thinking like gateway communities to Great Smoky Mountain National Park versus a really remote community in Nevada, say, um, we have done research on the connectivity of communities, um, you know, where we've looked at
• 17:40
  kind of divided communities into basically three different buckets. There are ones that are remote and rural. Um, then there are communities that are large and metro. Uh, and then we found there are these places that are kind of in between, um, that are connected to metro communities through airports, through commercial air service.
• 18:05
  And what's really interesting to see is that even though geographically these places might be farther afield-
• 18:13
  They, over time, end up looking a whole lot more like metros. So they grow quickly, they have higher income, they have higher educational attainment, and so it sort of puts them on a different trajectory. Um, but that's kind of the really big picture difference in geography, um, that we've dug into.
• 18:37
  And I would add to that, uh, the work that Headwaters has done on the value of protected public lands. And so really what's happening in communities is what kind of public land do you have, and are you able to participate in a metro economy even though you aren't a metro yourself? And if you have protected public lands and you've got the ability for remote workers to move to your community, for people to participate in different kinds of business activity, you're probably growing. And it has very little to do with the percentage of public lands in your county and really the economic geography that you have. Jackson Hole has three percent private lands, ninety-seven percent public lands, and it is the wealthiest county in the country.
• 19:23
  Megan, this may be unfair of me to ask you a follow-up question about a word that Mark used, but when he said amenities, it reminded me that you have written about the amenity trap, this idea that the very landscapes that draw people to a place can end up pricing out the community that, that lives there. It's a sort of self-fulfilling psychopomp situation where we're guiding ourselves toward trouble. Um, can you walk us through what that trap looks like on the ground and why it matters for conservation?
• 19:56
  Yeah, it absolutely matters so much. So
• 20:00
  when we first started researching the economics of public lands and economics of outdoor recreation associated with public lands,
• 20:08
  we were doing a lot of cheerleading. Um, it felt like, you know,
• 20:13
  basically trying to demonstrate how outdoor recreation can help diversify economies and, um, lead to community development and economic development. And as we were doing this research, we were hearing from more communities like, "That's great. We did all these things, and now our school teachers can't afford to live here. Now long-term residents are being priced out. Now we're struggling to pay for infrastructure upgrades." And so what we've seen is that oftentimes the very things that make these communities great places to visit and great places to live really do also threaten them with being loved to death. And
• 20:57
  so we were hearing this from a lot of places, and we did a deep dive to try to understand the nature of this problem, how it arises, and most importantly, to try to understand the policy solutions that are available, uh, for these communities. And, you know, the number one thing that we learned, um, you know, there's sort of-- you kind of put things into forming buckets of, you know, there are housing challenges, there's infrastructure challenges. You know, so how does the town of West Yellowstone, which has about fifteen hundred year-round residents, pay for the millions of people who come through, um, afford to have a wastewater treatment system that can support all those folks? Um, how do these gateway communities deal with wildfire and floods? They're on the front lines for natural disasters. Um, and how do they pay for that all? You know, these really small population communities pay for all the visitors. Um,
• 21:57
  and the biggest thing that we found was that, you know, ideally you plan ahead. Um, basically plan for success because if you have a thriving outdoor recreation economy,
• 22:10
  affordability is-- or unaffordability is going to be sort of a symptom of your success. And
• 22:19
  so ideally, you plan ahead and you recognize that if, say, a national monument is going to be designated nearby, a national park is going to be designated nearby, or we're building this incredible trail system and we want people to come enjoy it and visit and use it,
• 22:38
  you also need to be planning ahead for-- to make sure that your housing stays affordable for the folks who are living there and working there.
• 22:45
  Yeah. If I, if I can follow up here on this. I-I've,
• 22:49
  I've been thinking about this a lot. You know, Mark and Megan, you guys both live in a city that would resemble this, your community there at Bozeman, but how do we parse out some more of the bad and good in these examples of, like... I-I'll use where I live in the Flathead Valley. We've become a booming micro metro. Megan, back to your earlier comments, sometimes it's about proximities to airports that help drive community success and access, you know, that sort of thing. But we have one of the fastest growing populations in the country, certainly in the state of Montana. The jobs, I think, are mostly there, but to another one of your points, Megan, those jobs are not keeping pace with skyrocketing housing costs.
• 23:34
  Largely, the citizens embrace what they have there in the Flathead Valley. I, I don't find resentment for Glacier National Park, and I find an unbridled love for, like,
• 23:44
  wilderness areas like to Bob Marshall. But then I can look just up the road to Libby, Montana, and I see a community that's a little more isolated, uh, seems to sort of resist or push back on the public lands that surround it. It's a community that's struggling, I think I would say, uh, so much so that the community would openly embrace the return of an asbestos mine, at least it seems like that's the case, that has literally cut the life expectancy short of the citizens of Libby. I, I also think about places like Challis, Idaho, or like Sun Valley, Idaho, and the contrast between those two places. You know, like how do we think about finding what are the examples of what's really working? I'm not saying that it's working perfectly in a place like the Flathead or the Bozeman, because we have other issues. We have the affordability crisis, housing, that sort of thing. But I'm just wondering how we find, like maybe I'm grasping too much here, but how do we find the communities that are examples of what's, you know, been figured out that they've built success around their proximity to amazing landscapes? Am I, am I dreaming too big here?
• 24:57
  Maybe a little, and I do get asked this, uh, quite a lot, like, "Are there any communities that are doing it right?" And unfortunately, I think the short answer is no, because affordability is such a complicated topic and there are so many facets, even just, just if we're talking about housing, right? Housing is such a thorny, intertwined policy question for communities. Um, and so I think there are a lot of places that have, are maybe managing short-term rentals well. Maybe they're, uh, generating revenue in a way that's really equitable and innovative. Um, maybe they're s- uh, providing childcare for residents in a way that's, um, a new creative idea. So I think there are a lot of examples of places that are trying new things that are doing that well. Um,
• 25:50
  you know, to speak to your kind of, uh, juxtaposition of Libby compared to the Flathead, you know, I think one of the challenges that
• 26:01
  I've seen in some community work are places that don't
• 26:06
  start developing and diversifying their economy while they s-
• 26:12
  maybe while they still have existing industry, um, and start building up the next thing while they still have the resources, while they still have the population base that can support that transition. Um, I've been working in New Mexico in Grants, which is about halfway between Gallup and Albuquerque, um, and also in Farmington, New Mexico, which is northwest corner of the state, um, you know, up and down, but still has a pretty vibrant oil and gas economy. And Grants has been really struggling because their uranium mine closed down, their coal mine closed down, and they've been struggling to build their outdoor rec economy, even though they have two beautiful national monuments. The s- uh, Continental Divide Trail goes through there, but they don't have that economic base to build on and to help fund those, um, local investments to really capitalize
• 27:13
  on their access to public lands. In Farmington, New Mexico, they see their public lands and outdoor recreation on it as a way to diversify their economy, um, not replace, but to try to even out those booms and busts. And so they have, they passed a quarter of a percent sales tax
• 27:35
  that's generating quite a lot of revenue to help with wayfinding, help with marketing, help with recruiting manufa- outdoor rec manufacturing businesses to town. And so they're sort of planning on a, on a transition and diversification while they still have, have that existing industry.
• 27:53
  Megan, you mentioned that the housing issue is a, a thorny one, one that's really hard to untangle. And I don't wanna dig into all the aspects of that, but I do wanna ask you about one very specific thing. Um, you have framed housing affordability as a kind of Trojan horse for the public land sell-off. And when Senator Mike Lee last year introduced his public land sale amendment to the budget resolution mega bill, he, he pitched that effort squarely as a housing solution, right? Rather than sort of leaning on that more ideological federal overreach framing from years past that others may have used. Um, unpack that a little bit for us. How, how does the affordability crisis get used to make the case for disposing of public lands, and what's the flaw in that logic, if there is one?
• 28:41
  Oh, yes, there's a flaw. Absolutely. Um, so I think it, it's a politically savvy move to try to sell public land sell-off as a solution to housing affordability, uh, because so many of our Western communities, our public lands communities are dealing with unaffordable housing.
• 29:02
  Um,
• 29:03
  so it sounds great, um, but there are a couple of things that are wrong with,
• 29:07
  with it sort of in concept and specifically with the bill that was passed. So in many places,
• 29:15
  land isn't the issue. So the theory goes that if you build more housing, um, you'll alleviate some of the supply pressures and prices will go down. That's sort of Econ 101 price and, um,
• 29:30
  uh, demanded supply curves. But in most places, land isn't the limiting issue. There's infill opportunities. There's opportunities to increase density where an existing community footprints, um,
• 29:45
  and so that really isn't the,
• 29:48
  isn't what is causing unaffordable housing, um, in these places.
• 29:53
  And specifically with, uh, Lee's bill last summer, housing affordability was in the title, it was in the description, but there were no actual requirements, um, around the housing that would be built on that public land. So there's nothing saying those houses, houses had to be occupied by people who live and work in those communities, nothing pegging them to that housing that would be built to- Area median income, for example. So if you, one of the communities that would have had, um, quite a lot of land sold off for housing is around St. George, uh, Utah, where you have a tremendous number of second homes. And so in place in these second home communities, if you build more housing on public lands, the odds are really good they're just gonna be more second homes. Um, and we have some forthcoming research, um, coming out in the next month or two that really quantifies it, this effect, um, and highlights that if you have a lot of second homes, just adding more housing is not necessarily going to afford-- improve affordability.
• 31:05
  I would say this goes to the broader view that the current administration has about public lands. They have a very coherent and seemingly compelling idea that public lands are assets. These are assets on the nation's balance sheet, and they are valuable when they are liquidated, when they're sold, when the resources on them are sold and extracted, and they really don't have a lot of other values economically or to society. And so we see this consistently in all of the administration's policies, right? They're trying to
• 31:40
  boost as much low-value commodity production as possible to sell off public lands to solve other problems, whether it's paying off the debt, whether it's building affordable housing, right? And they all don't really work, but the damages are pretty dramatic because in order to increase commodity production to liquidate these assets for investors, you are rolling back regulations, you're stripping protections from special places. You're actually lowering the, the returns that the public gets when timber is sold, when oil and gas is sold. And what really what we're doing is doubling down on rural areas as a resource colony, that the value is to extract as much wealth as possible as quickly as possible to benefit the nation or to benefit the private sector with the promise that that's gonna benefit the people in those communities too. And it just doesn't work. And so what I worry about all the time is until we have a really compelling narrative that counters that, there's always gonna be a temptation to say, "Yeah, if we could just get rid of these regulations, if we could just get that mineral out of the ground, if we could just get that timber out of the forest, we're all gonna be better off." Right? And I think that narrative is really built around a couple of things.
• 32:58
  One is that we need to manage our public lands around stewardship rather than commodity production, because commodity production doesn't actually produce the things that you want. It doesn't produce forest resilience. It doesn't produce local economic prosperity.
• 33:14
  We need to think about
• 33:16
  taking the revenue that we're earning and putting it to good long-term intergenerational use. So instead of spending our oil, oil royalties as they come in, we should building-- be building up a sovereign wealth fund that is gonna make sure that everyone participates in that revenue forever. And we should really be thinking about the places where we are creating jobs. So I mentioned earlier that there's been a lot of automation in production in natural resource sectors. So if you... Sorry, I'm an economist, I will say this. Think about a graph where one line is going up and one line is going down.
• 33:50
  The line that's going up is the productivity and the value of the resource sector, and the line that's going down is the jobs.
• 33:59
  When you look at the same graph for recreation, it's two lines going up together.
• 34:04
  The number of visitors, the amount of visitor spending, the number of businesses that are participating in recreation economy is a direct line upwards with the jobs that it creates at the same time. So we need to rethink the way we are characterizing what we're trying to do for local economies, how we're trying to manage the lands, and what the real benefits are. Um, and I think that's why these conversations are so important to put a pin in why the administration's approach is failing the places that they claim to be benefiting and what we could do instead.
• 34:36
  More of the conversation after a word from those who support Wild Ideas.
• 34:41
  Hi, my name is Donna, and I'm from East Glacier Park, Montana, and you're listening to The Wild Idea.
• 34:49
  Megan, earlier you mentioned St. George, Utah, and once again, Utah's back in the headlines, it being revealed that there's already been mining claims filed in the parts of two national monuments in southern Utah that were just recently shrunken by the Trump administration. There's already a rush to fill, you know, and file mining claims. But Headwaters Economics did some very specific analysis of national monuments and what they mean to their surrounding communities. Can you talk about what that work uncovered and, and maybe provide us with some place-based specifics? Obviously, national monuments back in the headline with what happened in Utah. You know, there's obviously a range of story-storytelling going around about what national monuments mean, but, uh, could you talk some about the analysis that you guys did, the sort of long-term trajectory for these communities or places that are adjacent to these national monuments?
• 35:42
  Yeah. So we recently updated, um, some research that we did, uh, about a decade ago, and we looked at economic trends in communities adjacent to national monuments, both before they were designated and then after they've, they were designated. And we looked at a whole bunch of metrics. Um, we looked at population, employment, personal income, earnings per job, um, jobs in different sectors. And
• 36:12
  in a nutshell, we find that whatever was happening before monument designation continues to happen after monument designation. And so in summary, the national monuments are not disrupting local economies. It can be... Part of that narrative opposed to their designation and supporting shrinking of their boundaries is that, well, they're inhibiting the prosperity of the adjacent communities, and we just find that that's, that's not true. Um, just looking at Grand Staircase specifically, um, we've seen per capita income increase substantially since the monument was designated, um, forty-one percent. We've seen earnings per job increase by twenty-six percent. Um, and interestingly, there are actually more jobs in mining on average after the monument was designated. Um, there are seven jobs in the area before the mon- monument was designated and twenty-four jobs after. So it's, it's not big, but I think this just pokes holes in the argument that designating that national monument, um, you know, decimated the, the mining economy.
• 37:30
  Wow. I had no idea. What a stat.
• 37:33
  For any real economists listening out there, Megan's numbers are adjusted for inflation, so those increases are real increases.
• 37:42
  Yes. Thank you, Mark.
• 37:44
  I was just about to ask that, my-
• 37:45
  [laughs] Yeah
• 37:46
  ... economic brain, you know?
• 37:47
  [laughs] I'm sure you were. I'm sure you were. I can just see your eyes spinning. You're like, "Well, I wonder if that actually includes being adjusted for inflation."
• 37:56
  I don't know what any of those words mean. Mark, before the break, you were explaining to us what a policy might actually look like if we were to abandon this resource colony model, and I love that illustration, resource colony, and instead adopted one that delivers for both the wild landscape and the county and, or municipality that depends on it. A lot of, of rural or, or gateway communities near to or adjacent to public lands, you know, I, I get the sense they feel like decisions get made to them rather than with them. And so I'm curious, you know, what does genuinely investing in those adjacent communities look like? And, you know, to go further, uh, with your answer from earlier, what are some models out there that ensure the investment comes back around to benefit the land and the communities themselves?
• 38:51
  So I have two answers to that. Maybe I'll just do them separately. Um, one is that we're working on a proposal right now to stabilize the county payments. So that's revenue that is delivered to states and local governments from resource extraction. Right now, we send those as they come in. As we mentioned before, communities can become very dependent on them for a whole host of reasons, not all of which are their own choices. We'd like to create a sovereign wealth fund at the federal level to invest that money and replace those annual distributions with permanent payments that counties can rely on. They can make investment decisions over time. They don't have to worry about being able to pay teachers on an annual basis.
• 39:37
  That creates a whole bunch of opportunities. One is that you also have a whole bunch of principal that needs to get invested. And typically what would happen, uh, New Mexico has big sovereign wealth funds, Wyoming, Alaska, Montana. They hand their principal over to a investment firm that is gonna go make actual investments and see how much money they can make for the state. Sometimes those investments are even counterproductive to what people are trying to do at the local level. So we have an idea to invest money through local, um, impact investors, through community development financial assistant, uh, uh, institutions, through community foundations. It's actually aligning your investment strategy with your stable revenue, um, to leverage economic development opportunities. For all of the county payments programs, there's also a portion of the money that just goes into the federal treasury. So if we grab that and instead of spending the federal per- portion as it comes in, create a second permanent fund that could finance a whole bunch of economic development grants and capacity building programs, now you've got a trifecta of permanent and stable revenue to support local services, access to public capital to invest in local businesses, and a whole bunch of coordinated and aligned economic development support. That really creates the muscle behind local strategies to try to diversify and create resilience as extractive resources are declining and potentially going away. So that's one goal, right? We could... That's a real policy proposal that's working its way in DC that, you know, could really change the way we help communities transition.
• 41:28
  The second one is, uh, I'll point to Wallowa Resources in Oregon. They are doing some really good work on the stewardship economy and really thinking about how management of federal public lands can work for local contractors and produce outcomes on the landscape, which include forest fire, wildfire resilience, um, drought resilience, really aligning, um, the economic opportunity for communities with not just how much money you can make by selling stuff, but what are you producing? What are you leaving behind on the landscape that has a whole bunch of other values in terms of ecosystem services, uh, in terms of opportunities that are local instead of export opportunities that generally benefit investors somewhere else?
• 42:20
  So I've, I've gotta ask, uh, before we let y'all go, um,
• 42:26
  we, we've talked so much about, um,
• 42:29
  uh, how the case for conservation can run through economics in, in various models today. You know, it- It pays, it creates jobs, it fuels rural economies. And it's a great argument, it's a necessary one, but I sometimes, especially way back when, when I was an advocate on the Hill, sort of felt like sometimes it could be a, a Trojan horse, right? If we win protection battles on the strength of a balance sheet, are we ceding a, a moral case for that same protection and, and guaranteeing that the next fight for those places is also going to be fought on a balance sheet, right? Can, can something that lives by the numbers also die by them, I guess? And I, I wonder what you think about that. And I, I guess I, based on your answers just now, Mark, do the models you've offered here, you know, involving funds and, and stewardship economies dodge that problem, or is it still something we need to be wary of?
• 43:27
  There's no replacement in economics for beauty, for wonder, for experience. There's public lands out the window, if you can see them. I spent my morning hunting on public lands. There are just intrinsic values that you can't turn over into a balance sheet. I think we need to be careful and make sure that public lands work for communities and there are strategies to do that, and also not lose track of the fact that this is America's greatest idea, that these are unbelievable resources and assets, whatever you wanna call them, um, that can't be valued.
• 44:09
  I'm gonna stay as, as the, like, stick-in-the-mud economist. Um, I don't,
• 44:16
  I don't think that the moral and intrinsic value has to be separate from the economic arguments. Um,
• 44:25
  the economic arguments use dollars and cents, uh, to basically make a case for
• 44:33
  what's wild and beautiful. Um, and
• 44:38
  I initially got interested in environmental economics because I saw that if we
• 44:45
  can't put a dollar value on those intrinsic values, on those ecosystem services,
• 44:52
  when decisions are being made, trade-offs, benefit-cost analyses,
• 44:59
  those things that we care about essentially get a zero
• 45:02
  in that balance sheet and commodity production
• 45:07
  will,
• 45:08
  will win the day. And so,
• 45:11
  I feel most of my career has been around trying to figure out how do we,
• 45:17
  how do we value, um, how do we put a dollar value on those things that we intrinsically value? So I don't think they're separate.
• 45:24
  Well said, Megan. I, I'm,
• 45:27
  I'm gonna present this as a hypothetical as we sort of wrap things up here, but it's really, truly, actually meant as a return invitation for, for part two of this conversation. But I wonder if both of you could take a stab at this. What have we not talked about in this conversation that we should be talking about or that we should put a pin in for our next conversation?
• 45:47
  We've only scratched the surface here. There's got to be so much more to learn about this.
• 45:51
  Yeah, I mean, I, like, I'm curious, you know, Mark, to your ideas of the sovereign wealth fund and the stewardship economy, how would somebody from NACo, from the National Association of Counties, react to something like that? It, it's hard-pressed for me to think of a reason why they wouldn't see it as a positive, but I'm curious what we're not... What we haven't addressed yet since, as Anders put it, we just barely scratched the surface here.
• 46:13
  We introduced legislation with Wyden and Crapo that would have created a sovereign wealth fund to refinance the Secure Rural Schools program. NACo endorsed it. They were totally on board. The opposition came from two places, to the extent, you know, the NACo was on board, but there were some counties that didn't like it. There are counties that like tying their budgets to extractive industries because they're ideologically positioned or they, you know, like the industry, whatever, right? They're trying to, they're trying to get that back.
• 46:48
  There were also opponents on the environmental side that said, "Wait a second. Why are we, whether it's direct payments or a sovereign wealth fund, why are we providing any benefits to communities from timber extraction," right? So we kind of had that horseshoe effect [laughs] where, like, we had the broad middle and then at the two extreme ends, they came together to oppose it. [laughs]
• 47:13
  Uh, it feels like that could be an entire episode, honestly, that idea of that, that recreation sometimes can be its own extractive industry, right? And, uh-
• 47:20
  Yes.
• 47:21
  Yeah.
• 47:22
  We've been talking to Mark Hagerty from the Center for American Progress and Dr. Megan Lawson from Headwaters Economics. It's gonna be the first of, I know, a recurring conversation about the economics of public lands. But Mark, Megan, thank you so much for joining us today. It's been really, really great having you on the Wild Idea podcast.
• 47:40
  Yeah, thanks so much.
• 47:41
  [upbeat music] Coming up on the Wild Idea podcast, we check in with Marshall Johnson, the chief conservation officer with Audubon. We head to Redwood Country to hear the story of the now free-flowing Klamath River. We'll bring you a conversation with Cam Brezziger from the outdoor gear company, NEMO. And we have a special Election Day release of a conversation with the National Caucus of Environmental Legislators. We're also making plans to bring you a lot of great episodes all the way up to and through the end of the year. If you enjoy our show and want to support our continued efforts, you can buy us a coffee, which is a link on our website at thewildidea.com. Any gift of support always helps the cause. While you're there, be sure to subscribe to our newsletter, and please take a minute to recommend us to a friend. It's been fun digging into the spreadsheets, but let's get on those hiking boots and let's head on out there. And when we do, we'll see all of you on down the trail.
• 48:32
  [upbeat music] The Wild Idea is a production of Wild Idea Media and hosted by Bill Hodge and Anders Reynolds. Production and editing by Bryn Russell at Podlad. Digital support by Holly Wilkoszewski at DAPAC Digital. Our theme music, Spring Hill Jack, is from Railroad Earth and was composed by John Skehan. Our executive producer and ringleader is Laura Hodge. You can find The Wild Idea wherever you listen to or download your favorite podcast. If you have a minute, please take a minute to give us a rating. And if you really like us, we hope you'll subscribe. Learn more about us at thewildidea.com. [upbeat music]