Browsing by Subject "continuous cover forestry"

This study applies two novel forest economic models to analyze the effect of optimal carbon storage on the choice between clearcuts and continuous cover forestry. Unlike previous studies, we determine the economically optimal management regime endogenously, by optimization. We study a policy where the society pays forest owners a Pigouvian subsidy for the carbon that is sequestered by the stand as it grows. The focus of our analysis is a subsidy system that also takes into account the carbon both stored in and released from wood products. In the first part of the thesis, the question of optimal carbon storage is studied using a continuous time biomass model that does not include any a priori assumptions on clearcuts vs. continuous cover forestry. We show analytically that subsidized carbon sequestration postpones thinning and increases optimal stand volume along the rotation. With high carbon price the shadow value of stand volume becomes negative. Numerical results show that carbon prices within a realistic range may switch the optimal management regime from clearcuts to continuous cover management. A higher interest rate can lead to a higher stand volume and a longer optimal rotation, which contrasts the results of the classic Faustmann model. Next, the question is studied applying a more detailed size-structured transition matrix model based on empirically estimated Scandinavian growth data. This approach produces a more accurate description of the complex dynamics of uneven-aged stands and optimization of harvesting activities. According to numerical results, thinning is invariably carried out from above, and the size of the harvested trees increases with carbon price. Optimal rotation age increases with carbon price, and moderate carbon pricing is sufficient to switch the management regime to continuous cover management. Optimal rotation age also increases with interest rate. Clearcut management is the more competitive, the more productive is the site type. Both models suggest that carbon storage has a significant effect on optimal forest management, and that it typically favors continuous cover forestry. Similar analysis on optimal carbon storage in forestry has not been presented before. We also discuss various carbon subsidy systems in the context of developing climate policy.

Boreal forests fulfil a myriad of ecological, social and economic functions in modern society, which is why it is crucial to manage them in the best way possible. The prevailing forest management strategy in Finland has been rotation forestry, but a Finnish citizens’ initiative and the new EU forest strategy for 2030 have for ecological reasons been calling for a reduction in clearcuts and a switch to continuous cover forestry. While a growing number of economic-ecological optimization studies illustrate the economic aspects of optimal management regime choice in Nordic conditions, the understanding remains incomplete. To contribute to this line of research, this thesis studies the economically optimal management regime and species composition of mixed-species boreal forests with a previously unexamined species combination: Scots pine (Pinus sylvestris L.) and silver birch (Betula pendula Roth). The analysis is based on a theoretically sound and generalized stand-level economic-ecological model that maximizes the net present value of forestry income. In this setup, the optimal management regime is determined endogenously and flexibly, by dynamically optimizing both the rotation period and the timing and intensity of thinnings in a tri-level structure. All model details are empirically estimated. Forest stand development is described by size-structured empirical growth models by Pukkala et al. (2011, 2013) and by Pukkala et al. (2021), of which the latter has not been used in this line of analysis before. The results of this thesis show, for the first time empirically, that it can be economically optimal to conduct near-clearcuts without investing in artificial regeneration afterwards. Near-clearcuts create favourable conditions for utilizing the unharvested young trees and natural regeneration of pioneer species in generating a new tree cohort. This management strategy is found to be suitable for birch-dominated pine–birch stands with a 1% interest rate, as well as pure birch stands. With a 3% interest rate, continuous cover forestry becomes optimal for mixed stands. A further outcome of this thesis is that continuous cover management of pure pine stands is found to be more viable than in previous optimization studies. Further, it is shown that it is economically beneficial to let birch regenerate in a pine stand and even dominate it, due to improvements in overall ingrowth. The characteristics of the optimal solutions are, however, dependent on the ecological growth model used. In light of the cases studied in this thesis, neither rotation forestry nor continuous cover forestry is categorically superior in terms of timber income. There are demonstrably many cases where taking advantage of the environmental benefits of continuous cover forestry and higher tree species diversity is optimal also with respect solely to maximizing timber revenues.