2011 Economics Research Working Papers
State Mineral Production Taxes and Mining Law Reform
Authors: John Dobra, Matt Dobra Abstract: Fuel and leasable minerals mined in the United States have historically been subject to federal royalties while locatable minerals have not. In recent years there have been multiple attempts to alter this policy and subject locatable minerals to federal royalties as well; most recently the preliminary 2011 Obama budget included a gross royalty on hard-rock mining on public lands. This paper analyzes the issue of imposing such federal royalties from both a legal and economic perspective. From a legal perspective, it is argued that the state of western property rights precludes royalties on currently extant claims so revenues from a royalty would not be realized for many years. From an economic perspective, it is argued that the effect on revenue would be smaller than one might anticipate due to such a royalty crowding out state levies or encouraging vertical disintegration on the part of mining firms to avoid much of the burden of the royalty.
The Economics of Fuel Management: Wildfire, Invasive Species, and the Evolution of Sagebrush Rangelands in the Western United States
Authors: Taylor, M., Rollins, K. and Kobayashi, M. Abstract: In this article we develop a simulation model for estimating the economic efficiency of fuel treatments and apply it to two sagebrush ecosystems in the Great Basin of the western United States: Wyoming Sagebrush Steppe and Mountain Big Sagebrush. These two ecosystems face the two most prominent resource management concerns in sagebrush ecosystems relative to wildfire: annual grass invasion and native conifer expansion. Our framework simulates long-run wildfire suppression costs with and without fuel treatments explicitly incorporating ecological dynamics, stochastic wildfire, uncertainty fuel treatment success, and ecological thresholds. Our results indicate that fuel treatment is only economically efficient on the basis of wildfire suppression costs savings when the two ecosystems are in relatively good ecological health. Our approach also allows us to analyze how uncertainty about the location of thresholds between ecological states influences the economic efficiency of fuel treatments, as well as the influence of shorter wildfire return intervals and improved treatment success rates.