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Greenville Business Magazine

Study Shows Economic Impact of Natural Resources

Jan 24, 2018 05:07PM ● By Emily Stevenson
While South Carolina’s abundant natural resources are clear for the eye to see in its diverse landscapes from the foothills to the coast, their impact on the state’s economy might be easy to overlook for a casual observer.

A study from a pair of Clemson University professors lends perspective to their economic significance, concluding that natural resource-based sectors contribute $33.4 billion in economic activity annually to the state’s economy and are responsible for 218,719 jobs.

The study, produced by Clemson professor of forestry and environmental conservation Thomas Straka and associate professor of agricultural sciences David Willis for the S.C. Department of Natural Resources, found the collective economic contribution of South Carolina’s natural resource-based sectors has grown by 15 percent over the last seven years relative to a similar 2009 study.

The study also argues the estimated impact is conservative because, despite the significant economic contribution of six natural resource-based sectors — fishing, hunting and wildlife viewing, coastal tourism, commercial fisheries, boat industry, mining and forestry — on the South Carolina economy, the value of the state’s water resources is not directly included in the analysis.

“To start with, without natural resources there wouldn’t be any state economy because that comes down to the fundamentals of water and land and (other) resources such as that,” Straka said. “We didn’t even take it that far, but if you wanted to go to extremes, it’s the basis of the entire state economy.

“If you want to put it in context, it’s as big as any of the other manufacturing sectors, and the state should understand that it’s comparable to other manufacturing sectors in terms of its contribution,” he said.

As defined by the study, the six natural resource sectors are responsible for 8.3 percent of the gross state product and 8.6 percent of all jobs in the state. Direct employment in the six natural resource sectors is 130,891 jobs at an average salary of $35,959. After accounting for the multiplier effect, the sectors contribute 218,719 jobs to the state economy at an average salary of $39,337.

“South Carolina’s natural resources are our most valuable economic asset,” said Alvin Taylor, director of SCDNR. “Natural resources are the major contributor to our quality of life, which is why corporations want to locate here, why people want to move here and it is why people want to stay here.”

South Carolina’s total area is 20.5 million acres, with land accounting for 19.2 million acres — of which forests cover 13 million acres — and water for 1.3 million acres, the study shows. The state also has 11,000 miles of rivers and streams (almost one-half mile for each square mile of land surface), more than 1,600 lakes greater than 10 acres in size, including 19 reservoirs greater than 1,000 acres in size.

Clemson Public Service and Agriculture (PSA) plays a significant role in conserving the state’s natural resources and protecting its environment by delivering impartial, science-based information through research, outreach and regulatory programs.

As the state’s primary land-grant institution, Clemson’s mission is straightforward: teaching, research and outreach. This year, the university is proposing recurring funding of $2 million from the state legislature to fund a complete and integrated Water Resource Research, Management and Technology program to further these efforts.

Clemson also will propose one-time funding of $7 million to renovate an existing building to serve as a statewide Water Resources Center and establish a base for comprehensive water programs, transforming it into a Southeastern regional hub for conducting analytical water-related research.

“You look around the state and you see these beautiful trees and you see lakes,” Straka said, “but there’s a tremendous amount of recreation and tourism that wouldn’t take place in South Carolina without natural resources. In Myrtle Beach and other coastal areas, a lot of that tourism is natural-resource based. The Upstate’s economy, as well, is very much natural-resource based. So, the study takes the outdoor recreation component and tries to put a value on that to the state’s economy.”

First published in December 2016 , the study analyzed the impact of natural resources on the state’s economy through direct, indirect and induced impacts. Direct impacts are those effects generated within a particular sector that impact the state’s economy, indirect impacts are effects between sectors when one sector causes additional (or less) activity in another sector, while induced impacts are the domino effect of changes in expenditures rippling through the economy.

The study focuses on four key variables: employment, earned income, contribution to value added and total industry output.

In terms of the natural resource-based sectors analyzed by Straka and Willis, the total effect on the state’s economy are approximately as follows: fishing, hunting and wildlife viewing, $2.7 billion; coastal tourism, $9 billion; commercial fisheries, $42 million; boat industry, $1 billion; mining, $1.17 billion; and forestry, $19.4 billion.

“Studies such as this are important to the state because they help the public, industry and other interested audiences, the citizens of South Carolina, who need to understand the importance of forestry and natural resources to the state,” Straka said. “They also are useful for people who are looking at the state for investment and important to the state legislature because they set the tone for how forestry or natural resources are impacted in the state budget.

“We have a beautiful state with a lot of natural resources, and that’s what’s driving a whole segment of the economy.”

A separate 2017 study by Straka, Willis and assistant professor Puskar Khanal, sponsored by the university and several forestry organizations, measured the impact of the forestry sector on the state’s economy as even more significant — contributing more than $21 billion and 84,000 jobs, making it the state’s No. 1 manufacturing sector in terms of jobs and labor income ($4.5 billion).

Clemson’s department of forestry and environmental conservation (FEC) works to steward South Carolina’s valuable natural resources by preparing its future workforce leaders in applied natural resource conservation and ecology that include academic programs in Environmental and Natural Resources (B.S.), Forest Resource Management (B.S.), Forest Resources (Master of Forest Resources, M.S., Ph.D.) and Wildlife and Fisheries Biology (B.S., M.S., Ph.D.).

A field-oriented approach is a hallmark of Clemson’s forestry and wildlife programs that immerses students in a variety of vegetative, forest stand and habitat types, while working closely with state, federal and private natural resource professionals.

“All of our forest resources management students — 100 percent of them — have jobs before they graduate,” said Greg Yarrow.  chair of the department and professor “Many of our students intern with industry, so they get a taste of how demanding the job is and what’s required, and some of them go on and work with state and federal agencies for internships.

“There’s a significant turnover happening now and will continue to happen for probably the next five years with the greying of the forestry industry and the industry looking for more employees to fill key positions, as well as expanding opportunities with new markets. So, it’s a really exciting time for natural resources in the state.”