Private and Social Costs of Surface Mine Reforestation Performance Criteria

We study the potentially unnecessary costs imposed by strict performance standards for forest restoration of surface coal mines in the Appalachian region under the Surface Mining Control and Reclamation Act of 1977 (SMCRA) that can vary widely across states. Both the unnecessary private costs to the mine operator and costs to society (social costs) are reported for two performance standards, a ground cover requirement, and a seedling survival target. These standards are examined using numerical analyses under a range of site productivity class and market conditions. We show that a strict (90%) ground cover standard may produce an unnecessary private cost of more than $700/ha and a social cost ranging from $428/ha to $710/ha, as compared with a 70% standard. A strict tree survival standard of 1235 trees/ha, as compared with the more typical 1087 trees/ha standard, may produce an unnecessary private cost of approximately $200/ha, and a social cost in the range of $120 to $208/ha. We conclude that strict performance standards may impose substantial unnecessary private costs and social costs, that strict performance standards may be discouraging the choice of forestry as a post-mining land use, and that opportunities exist for reform of reforestation performance standards. Our study provides a basis for evaluating tradeoffs between regulatory efficiency and optimal reforestation effort.