Browsing by Subject "uneven-aged 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.

Forests provide not just timber, but also a host of other benefits, such as carbon sequestration, biodiversity, recreational opportunities and beautiful scenery. From an economic perspective, such a multiplicity of utili-zation options of forests may be interpreted as joint production. However, these utilization options are often competing at least to some extent. In a changing society, the importance of non-timber benefits are increas-ing, and forest management is subject to more stringent environmental requirements. Studies have shown that targets for the use of forests have become more varied, and the interest in alternative methods of forest management has increased. The aim of this study was to create an overall picture of how environmental values are taken into account in forest economics at the stand level. Special attention was paid to uneven-aged forest management, since the method is often considered more appropriate for multi-objective forest management. Uneven-aged man-agement of forests may enable a more efficient joint production of many benefits. Nevertheless, to maintain e.g. forest biodiversity in uneven-aged stand, there is still need to ensure a robust amount of individual trees and dead wood by leaving sufficient number of retention trees. Hence, valuing environmental benefits may well have an impact on optimal stand management. In this study an optimization model is formulated to analyze uneven-aged forest management when stand-ing old trees have an environmental value. Optimization problem was solved without any time constraints or a predetermined steady state. The model was tested with both linear and nonlinear environmental valuation function. In addition, it was examined how relative value of environmental benefits and interest rate affect the structure of the stand and harvest revenues. As an alternative method, this study presented optimization of harvests while satisfying a constraint intended to meet an environmental management objective. This constraint was used to study the opportunity cost of retention trees. In conclusion, the results indicated that the valuation of environmental benefits affects the optimal harvest-ing and stand structure. When raising the interest rate, fewer retention trees should be left to the stand. The number of retention trees affects present value of harvest revenues, and the optimal solution between com-peting benefits depends on the preferences of the decision maker.