Loggers and Landslides: Coase in action

A neat example of how the sufferers were unable to prevent the externality. Explain why Coase failed in this case.

In the case of logging in the US the problem was known about, the consequences were predicted so why did it still happen? Logging is even regulated so why were the regulations not enforced? The market does not always work, even a regulated one.

This is a long article but worth reading.

Logging and landslides: What went wrong? [Seattle Times]

BOISTFORT VALLEY, Lewis County — When Weyerhaeuser began clear-cutting the Douglas firs on the slopes surrounding Little Mill Creek, local water officials were on edge.

Some of these lands had slid decades ago, after an earlier round of logging. They worried new slides could dump sediments into the mountain stream and overwhelm a treatment plant.

Those fears came true last December when a monster storm barreled in from the Pacific, drenching the mountains around the Chehalis River basin and touching off hundreds of landslides. Little Mill Creek, filled with mud and debris, turned dark like chocolate syrup.

More than three months passed before nearly 3,000 valley residents could drink from their taps again.

"I have never seen anything like this before, and I hope I never do again," said Fred Hamilton, who works for the Boistfort Valley Water Corp.

State forestry rules empower the Department of Natural Resources (DNR) to restrict logging on unstable slopes when landslides could put public resources or public safety at risk.

But in Little Mill Creek and elsewhere in the Upper Chehalis basin, a Seattle Times investigation found that Weyerhaeuser frequently clear-cut on unstable slopes, with scant oversight from the state geologists who are supposed to help watchdog the timber industry.

The December storm triggered more than 730 landslides in the Upper Chehalis basin, according to a state aerial survey. Those slides dumped mud and debris into swollen rivers, helping fuel the floods that slammed houses, barns and farm fields downstream.

A disproportionate number of those landslides started on slopes that had been clear-cut.

The Seattle Times, using information from state aerial surveys, examined 87 of the steepest sites that had been clear-cut. Nearly half of them suffered landslides during the storm. Those sites represented less than 8 percent of the total acreage — both logged and forested — in the Upper Chehalis and its tributary drainages. But the sites produced about 30 percent — 219 — of the landslides.

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