Estimating the economic value of big game habitat production from prescribed fire using a time series approach

This paper demonstrates a time-series production technique to quantify the deer harvest and deer hunting benefits of controlled burns or prescribed fire. The time series regression model showed a statistically significant and positive effect of prescribed fire on deer harvest. The net economic value of the resulting additional deer hunting benefit was estimated using the Contingent Valuation Method at $ 98 per additional deer harvested. The initial deer hunting benefits of an additional 1,000 acres of prescribed burning are between $ 2,674 and $ 3,128 or $ 2-3 per acre. The costs of prescribed burning greatly exceed these benefits, suggesting that deer hunting benefits represent only a small part of the multiple use benefits of prescribed fire.     

Market and welfare implications of the reservation price strategy for forest harvest decisions

Previous studies have reported significant gains from adopting the adaptive harvest strategy under conditions of timber price uncertainty. For the final harvest decision in even-aged stand management, the adaptive strategy typically means that a stand is harvested when the timber price is sufficiently high, whereas low prices are avoided by postponing the harvest. Such a harvest behavior may have significant impacts on the future price process, which in turn affects the landowner's profits. Moreover, it would certainly affect the timber-based industry and consumers. This paper assesses these impacts in a hypothetical timber market, using the Faustmann rule (FR) as a benchmark. The results show that changing from the FR to the reservation price strategy (RPS) reduces the supply of timber, thereby pushes up the price level. The RPS significantly reduces the short-run random variation of timber price. In the long run, both the mean and the variance of the timber price tend to stabilize. Depending on the anticipated price variation underlying the RPS, the expected timber price may be close to, or much higher than, the benchmark level, and the variance of price can be very large or very small. The welfare effect of the RPS is small if the anticipated variance of timber price used to optimize the RPS is small. If the anticipated variance of price is large, then the RSP leads to significant increase in the landowners’ profits and at the same time reduces the consumer surplus by a much larger amount.     

Efficiency in forest management: A multiobjective harvest scheduling model

This paper presents a new forest harvest scheduling model taking into account four conflicting objectives. The economic factor of timber production is considered and also aspects related to environmental protection. We also incorporate adjacency constraints to limit the maximum contiguous area where clear-cutting can be applied. The model proposed is applied to a timber production plantation in Cuba located in the region of Pinar del Río. One factor to be taken into account in Cuban plantations is that the forest has a highly unbalanced age distribution. Therefore, in addition to the classical objectives of forest planning, we have the objective of rebalancing age distribution by the end of the planning horizon. Explicitly, the four objectives considered in the model are: (a) obtaining a balance-aged forest; (b) minimizing the area with trees older than the rotation age; (c) maximizing the NPV of the forest over the planning horizon; and (d) maximizing total carbon sequestration over the whole planning horizon. The solution to the proposed model provides a set of efficient management plans that are of assistance in analysing the tradeoffs between the economic and ecological objectives. The model is also applied to randomly generated simulated forests to compare its performance in other contexts. As the problem is a multiobjective binary nonlinear model, a metaheuristic procedure is used in order to solve it.     

Valuing high altitude spruce-fir forest improvements: importance of forest condition and recreation activity

High altitude spruce fir forests are typical around the world and are often subjected to multiple forms of recreational use. In this paper, we use household and recreation group data for a spruce fir forest high in the Appalachian Mountains of the U. S. to evaluate the benefits from forest protection (i. e., from improving the forest condition). Our benefits estimation procedures use the referendum-type, contingent valuation (CV) approach of Cameron (1988). We modify the usual practice of obtaining a single willingness-to-pay (WTP) value by using alternative questionnaire scenarios and conducting tests to examine i) household and recreation group value sensitivity to forest condition, and ii) recreation group differences in WTP for forest protection. A first sample of southeastern U. S. households was asked to value a forest protection program for a spruce-fir forest showing no impact from insect disturbance or atmospheric deposition. The second sample was asked to value a protection program for a forest already experiencing impact from insect infestation and air pollution. Logit analysis of the two samples revealed no statistically significant difference in household WTP between the two forest protection programs. Further analysis indicated that consumptive forest users (i. e., hunters and anglers) held forest protection values that were sensitive to a change forest condition, while nonconsumptive forest users (i. e., campers and hikers) held values that were insensitive to the same condition change. Recreation group comparisons revealed that consumptive forest users also held lower values for forest protection than nonconsumptive recreationists. These results demonstrate the importance of estimating public values for forest protection in terms of heterogeneous groups rather than as a homogeneous whole.     

The potential and cost of increasing forest carbon sequestration in Sweden

This paper examines the potential and the cost of promoting forest carbon sequestration through a tax/subsidy to land owners for reducing/increasing carbon storage in their forests. We use a partial equilibrium model based on intertemporal optimization to estimate the impacts of carbon price (the tax/subsidy rate) on timber harvest volume and price in different time periods and on the change of forest carbon stock over time. The results show that a higher carbon price would lead to higher forest carbon stocks. The tax/subsidy induced annual net carbon sequestration is declining over time. The net carbon sequestration during 2015–2050 would increase by 30.2 to 218.3 million tonnes of CO₂, when carbon price increases from 170 SEK to 1428 SEK per tonne of CO₂. The associated cost, in terms of reduced total benefits of timber and other non-timber goods, ranges from 80 SEK to 105.8 SEK per tonne of CO₂. The change in carbon sequestration (as compared with the baseline case) beyond 2050 is small when carbon price is 680 SEK per tonne of CO₂ or lower. With a carbon price of 1428 SEK per tonne of CO₂, carbon sequestration will increase by 70 million tonnes of CO₂ from the baseline level during 2050-2070, and by 64 million tonnes during 2070–2170.     

Forecasting the German forest products trade: A vector error correction model

In the forest sector often very complex models are used that take into account a variety of factors. In addition to variables that describe the natural production of wood, into these models flow among others also such variables that depict nature conservation legislation, market contexts, etc. The limited availability of large amounts of data and more particularly of precise data to all these subject areas considerably weakens the validity of the models. Our study therefore takes up the challenge to develop a model, as simple as possible, that can help to estimate export and import volumes as well as export and import prices of raw timber in Germany. To this end, we apply the technique of time series analysis and develop a simple model that allows for short-term and medium-term forecasting in the German forest sector. We show that using a vector error correction model (VECM) can succeed in a relatively simple modelling of future quantities and prices of raw timber for Germany.     

A dividing issue: Attitudes to the shooting of rear and release birds among landowners,hunters and the general public in Denmark

Why are organised shoots involving birds that are farm-reared and subsequently released a dividing issue in several countries? As a contribution to answering this question the paper reports a national survey of landowners (n = 1207), hunters (n = 1130) and the general public (n = 1001) in Denmark. While there was broad agreement across all three groups that recreational hunting of naturally occurring “surplus” wildlife is acceptable, the release of farm-reared game birds for shooting was a dividing issue, both within the groups and between them. The majority of participants (51%) in the survey representing the general public were against the practice; a majority of hunters (61%) were in favour of it; and landowner approval rates lay between these two poles. Respondents with a “mutualist” or “distanced” wildlife value orientation according to the definitions by Teel et al. (2005) consistently displayed a more negative attitude to rear and release shooting than those with a “utilitarian” orientation. The differences in attitude could not be explained in terms solely of underlying concerns about nature conservation and biodiversity protection. Concerns about the behaviour of the released birds, and about hunting “culture” and regulatory measures, also informed the participants’ attitudes. The regulatory framework governing shooting based on the release of farm-reared birds could reflect a wider range of concerns than those hitherto acknowledged.     

The financial benefits of forest certification: Case studies of acacia growers and a furniture company in Central Vietnam

The demand for forest products is growing and plantation forests are supplying an increasing proportion of wood to industry. There are also increasing market requirements to demonstrate the sustainability of timber supply. Vietnam has some 3.9 M ha of plantation forests, 44% of which is on short-rotations managed by smallholders. More than 80 percent of the harvested volume from the plantation forests is used for woodchip production to serve domestic and international markets. The Vietnam Government has goals to increase the domestic supply of suitable wood for furniture production to international markets by increasing the supply of larger logs grown in plantations and the supply of certified wood to industry. However, it is not clear that these objectives will necessarily benefit growers and processors. This study compared financial returns from certified and non-certified forest products for: (1) growers with 10-year rotation acacia plantations; and (2) a furniture processing business (battens for chair and table) in Quang Tri Province, Central Vietnam. The data were collected from smallholder tree growers and a sawmilling company, triangulated with and supplemented by formal and informal interviews with other stakeholders. Currently, much of the cost of certification is met by external aid donors. Results showed that net returns from both certified and non-certified timber products are positive for both actors and are higher from certified timber production than non-certified timber production. When the full costs of certification are included, the benefits to growers of certification are much reduced and potentially negative unless the fixed costs can be spread over a large group of growers. A minimum of group with 3000 ha may be required to make certification cost effective. In recent years, the price difference between the certified and non-certified logs is narrowing and this may discourage farmers from attaining certification. For the sawmiller, the benefit of certified timber production is greater. It would be in their interests to increase prices paid to growers for certified logs. Government policy measures to support certification should include consideration of who bears the cost, support for aggregation of smallholder growers and improved communication in timber supply chains.     

Twenty-three years of forest cover change in protected areas under different governance strategies: A case study from Ethiopia’s southern highlands

Tropical deforestation has heightened the need for effective governance of protected areas aimed at conserving natural resources, biodiversity, and ecosystem services. The southern highlands of Ethiopia hold some of the largest expanses of contiguous tropical forest in Ethiopia. This area also is undergoing rapid land conversion. Multiple protected areas with different management strategies and objectives have been established, in part, to conserve forests and the ecosystem services they provide. We examined four types of protected areas; a national park, a state-run forest enterprise, two occupied privately leased hunting concessions, and two unoccupied hunting concessions, to evaluate their effectiveness at protecting forest cover. We used 1509 field plots with medium-resolution Landsat imagery from 1987 to 2015 to develop models of forest cover at approximately five-year time intervals. We found protected areas that were actively managed for timber production or hunting were more effective at conserving forest cover than the national park and the unoccupied hunting concessions. Over the study period, net forest cover change was −7.8% for the national park, 12.9% for the state-run forest enterprise, −0.2% and 13.3% for the occupied hunting concessions and −14.0% and −13.0% for the unoccupied hunting concessions. We also discuss how the change in forest cover relates to historic political events. In places like Ethiopia where the federal resources needed to conserve forests are limited, promoting a network that includes both federally and non-federally managed protected areas can result in more area and forests under protection.     

Costs and benefits of forest conservation: regional and local comparisons in Eastern Finland

In addition to environmental interests vs. timber production, debates on forest conservation have typically dealt with nationwide vs. local and regional interests. While most previous studies have focused on the nationwide perspective, this paper considers the benefits and costs of existing conservation areas from the regional and local point of view. The non-market benefits of conservation are measured by means of contingent valuation. Unlike most discrete-choice CV studies, we allow for zero willingness to pay. The results of our cost-benefit analysis suggest that the aggregate benefits of conservation clearly exceed the total opportunity costs when viewed from a regional (or nationwide) perspective, but at the local level costs exceed the benefits of conservation. Differences were also found in locally vs. regionally relevant benefits and costs.     

Demand for Wildlife Hunting in British Columbia

We present estimates of the demand for hunting licenses by residents and nonresidents in British Columbia for the period 1971–2000. We obtain estimates of both short-run and long-run price elasticities and discuss their revenue implications for future fee increases. We find the demand by nonresidents to be strongly correlated with U.S. income variation over the business cycle, but find no such role for cyclical income variation for resident hunters. The ability of the government to increase revenues from resident hunters turns out to be limited, particularly in the long run, while greater opportunities exist for raising revenues from U.S. hunters as short- and long-run price elasticities of demand are quite inelastic. We argue that conservation surcharges on foreign hunters are one way of capturing more of the resource rent.     

Editorial - Multiple-use forestry

The problem of multiple-use forestry arises because (1) a forest can be managed to provide a wide range of products and services, (2) the different uses are not perfectly compatible with each other, and (3) some products are not priced in markets and many of the services a forest provides have the characteristics of public goods. Examples of major forest products include, in addition to timber, edible berries, fungi, and hunting games. Forests also provide recreation opportunities and various environmental services (such as regulating local climate, reducing soil erosion, reducing pollutants in the atmosphere, regulating the global climate, providing habitats for wildlife, etc.). The outputs of nontimber goods in general depend on the quantity and structure of the forest, which can be changed by various forest management activities. However, a forest state most suitable for the production of one good is usually not optimal with respect to another good. Typically, there does not exist a set of management activities that simultaneously maximize the outputs of timber and all other goods.Another way to understand the conflicts between different uses is to view standing timber as an intermediate product of forestry investment, which is employed as an “input” for the production of timber products and nontimber goods. Thinking in this way, the conflicts arise partly because timber production and nontimber uses compete for the same input, and partly because of the differences in the “production technology” among different nontimber goods. A change in the standing timber may have positive impacts on some nontimber uses, but have negative effects on others. Because of the conflicts among different uses, it requires that both timber products and nontimber goods should be explicitly incorporated into forestry decision-making in order to achieve the greatest benefits to the forest owner and/or the public.Most of the economic analyses of multiple-use forestry decisions have explicitly or implicitly adopted the view that multiple-use should be achieved in individual stands. Each stand should be managed to produce an optimal mix of timber products and nontimber goods. Another view of multiple-use forestry is to manage each stand for a primary use, whereas multiple-use concerns are addressed by allocating different stands in a forest to different uses. A general argument in support of the primary-use view is that specialization makes for efficiency. The production of timber and nontimber goods is a joint process, however. Strictly speaking, one cannot separate timber production and the production of different nontimber goods. For example, managing a stand for timber production does not exclude the possibility of producing some nontimber goods in the stand. Since every stand usually produces more than one product, efficient multiple-use forestry requires that each stand should be managed for an optimal mix of timber and nontimber outputs. On the other hand, it may well be the case that the optimal multiple-use mix for a particular stand consists of a maximum output of one product. In this case the optimal multiple-use management decision would coincide with the optimal decision pertaining to a single use. In other words, it may be optimal to manage a particular stand for one primary use. Using the terminology of economics, primary-use may be efficient for stands in which the multiple-use production set is nonconvex. Recent research has explored several sources of nonconvexity in the multiple-use production set. However, there is no evidence supporting the argument that specialization is always more efficient than multiple-use management of individual stands. From an economics viewpoint, efficient primary-use is special cases of multiple-use stand management.A widely recognized limitation of multiple-use stand management is that, by considering each stand separately, one neglects the interdependence of nontimber benefits and ecological interactions among individual stands. The nontimber benefits of a stand depend on the output of nontimber goods from other stands. Likewise, the nontimber output from one stand affects the value of nontimber goods produced in the other stands. Ecological interactions among individual stands imply that the output of nontimber goods from two stands in a forest differs from the sum of the outputs from two isolated stands. These interdependence and interactions imply that the relationship between the nontimber benefits of a stand and the stand age (or standing timber stock) cannot be unambiguously determined - it depends on the flow of nontimber goods produced in the surrounding stands. Therefore, it is improper to determine optimal decisions for the individual stands independently. In stead, efficient multiple-use forestry decision should be analyzed by considering all the stands in a forest simultaneously.Another serious limitation of multiple-use stand management is that each stand is treated as a homogenous management unit to be managed according to a uniform management regime. One implicitly assumes that the boundaries of each stand is exogenously given and will remain unchanged over time. This assumption imposes a restriction on the multiple-use production set, thereby creates inefficiency. As an example, consider a large stand with a nonconvex production set. It may be possible to eliminate nonconvexity in the production set and push the production possibility frontier outwards by dividing the stand into several parts and managing each part for a primary-use. It may also be efficient to combine two adjacent stands into one to be managed following a uniform regime, because of the presences of fixed management costs, and/or because the relationship between some nontimber outputs and stand area is not linear.In contrast to income from timber production, nontimber goods produced at different time points are not perfect substitutes. The rate at which a forest owner is willing to substitute a nontimber good produced at one time point for that produced at another time point changes with the outputs of the nontimber good at the two time points. In general cases, the nontimber goods produced at one time point cannot be consumed at another time point, and the marginal utility of a nontimber good decreases when its output increases. This provides a motivation for reducing the variation in the output of nontimber goods over time. An effective approach to coordinating nontimber outputs over time is to apply different management regimes to different parts of a stand, or apply the same regime to adjacent stands, which would change the boundaries of the stands. Preserving the existing stand boundaries would limit the possibility of evening out the nontimber outputs over time, and thereby lead to intertemporal inefficiency in multiple-use management.In previous studies of multiple-use forestry decisions the nontimber outputs or benefits are usually modeled as functions of stand age or standing timber stock. Future flows of nontimber goods or benefits are incorporated into a stand/forest harvest decision model to explore the implications of nontimber uses for optimal harvest decisions. While stand age and standing timber stock may have significant impacts on nontimber outputs, other forest state variables, e. g. the spatial distribution of stands of different ages/species, may be of great importance to the production of nontimber goods. Recognition of such forest state variables could change the relationship between timber production and nontimber outputs and therefore change the optimal forest management decisions.In summary, multiple-use forestry is not simply an extension of timber management with additional flows of benefits to be considered when evaluating alternative management regimes. Recognition of multiple uses of a forest leads to two fundamental changes of the forestry decision problem. First, the optimal intertemporal consumption of forestry income is no longer separable from forest management decisions. In general, the optimal intertemporal consumption of forestry income depends on future flows of nontimber goods, implying that the consumption-saving decision should be made simultaneously with the decision on the production of timber and nontimber goods over time. Secondly, it is no longer appropriate to optimize the management regime for each stand separately. The nontimber outputs from a forest depend on the age distribution of individual stands, and on a wide range of other forest state variables such as the spatial distribution of stands of different ages and tree-species composition. Ecological interactions and interdependence among stands imply that management regimes for different stands should be optimized simultaneously. In addition to changing rotation ages and harvest levels, efficient multiple-use forestry requires optimizing the spatial allocation of harvests, redefining the boundaries of stands, coordinating the choices of tree species in regeneration of harvested area and so on.The lack of rigorous production functions for nontimber goods imposes a severe restriction on attempts to perform comprehensive economic analyses of multiple-use forestry decisions. This restriction in itself is no justification for ignoring many of the key aspects of multiple-use forestry problem and modeling the problem as one of determining the optimal rotation age or optimal harvest level. It requires that economic models of multiple-use forestry should be developed with special consideration of the vague and imprecise information regarding the relationships between nontimber outputs and forest state variables.Peichen GongDepartment of Forest EconomicsSE-90183 UmeåSweden     

Estimating the long-run impact of forest fires on the eucalyptus timber supply in Galicia,Spain

Using annual data, we have estimated the timber harvest of eucalyptus in the region of Galicia (Spain). The explanatory variables considered were price, pulp exports, and salvage timber. The latter variable was used as a proxy for forest fires. The problems related to spurious regression were addressed by applying the bounds testing approach to cointegration, and confidence intervals were constructed using the bootstrap technique. The results indicate that pulp exports have a positive effect on the harvested timber volume. Moreover, we find that salvage timber positively affects the timber supply. This result indicates that there is no substitution between salvage timber and non-damaged timber. It also suggests that the natural expansion of the eucalyptus in Galicia compensates for the destruction caused by forest fires, avoiding supply shortages. On the other hand, and according to the economic law of supply, the timber price shows a positive effect.     

Review - Roger A. Sedjo (2003): Economics of Forestry

Ashgate Publishing Limited, Gower House, Croft Road, Aldershot, Hants GU11 3HR, England (www.ashgate.com). 498 p. £ 100.00. ISBN 0-7546-2237-1 (hardback).Being one volume in the series of the International Library of Environmental Economics and Policy (T. Tietenberg and W. Morrison, gen. eds.), this book is a collection of some of the most significant journal essays in forest economics and forest policy. In compiling this volume, Roger Sedjo did a great service to the forest economics profession.This volume includes twenty-five essays originally published between 1849 and 1996 in a dozen journals, and one chapter from the Third Assessment Report of the International Panel on Climate Change (IPCC, 2001) which addresses the biological sequestration of carbon in terrestrial ecosystems. These are organized into four parts: the harvest rotation issue, timber supply, multiple-use and non-timber outputs, and global issues. An introduction essay to this volume, written by the editor, provides an overview of the major issues in forest resource management and discusses some the most important contributions to the forest economics literature.The eleven essays in the first part of the book provide a rather complete coverage of the most important contributions to the literature on optimal rotation age, which is a fundamental issue in forest management and forestry investment. Four of the essays (Faustmann 1849, Ohlin 1921, Bentley and Teeguarden 1965, and Samuelson 1976) address the basic formulation and interpretation of the optimal rotation model. Four essays (Löfgren 1985, Newman, Gilbert and Hyde 1985, Reed 1984, and Brazee and Mendelsohn 1988) extend the basic rotation model to examine the rotation age decision in the presence of deterministic trends and uncertainty in timber yield and price, respectively. Based on the Faustamnn rotation model, Klemperer (1976) and Chang (1982) examine the impacts of taxation on forest value and on the optimal rotation age. Koskela (1989) provides a detailed analysis of the impacts of taxation on timber harvest decisions under price uncertainty. What I feel missing in this part is a comparative statics analysis examining the impacts of changing economic parameters on the optimal rotation age.Part II includes five essays on economic analysis of long-run timber supply. Clawson (1979) reviews the historical development of forest resource and forest utilization in the United States. Vaux (1973) examines the long-run potential supply of timber from forest plantations in California. Berck (1979) investigates the difference in harvesting behavior between private forest owners and public managers. Lyon (1981) and Lyon and Sedjo (1983) examine the optimal exploitation of old-growth natural forests and the transition to steady state. While these essays all focus on the long-run timber supply in the United States, the methods developed and used in these papers could be applied for any other region. The exploitation of old-growth natural forests and the long-term availability of timber have been without doubt two major concerns in the United States. In many parts of the world, however, concerns about timber supply in the short-run have also had great influences on the development of forest policy. It would have been appreciated if a couple of essays addressing the short-run supply of timber had been included.Part III contains three essays dealing with the problem of multiple-use forest management. Gregory (1955) develops an economic framework for multiple-use management based joint production theory. Hartman (1976) examines the multiple-use rotation age decision. Swallow, Parks and Wear (1990) investigate the problem of non-convexities involved in multiple-use rotation age decisions. The merits of these essays lie in that they use rather simple models to demonstrate the importance of incorporating non-timber benefits in forestry decisions and the complexities of the multiple-use problem. In his 1976 essay, Hartman points out that in many situations management practices applied to one stand affect the value of non-timber outputs derived from the adjacent stands; such interdependence needs to be incorporated into multiple-use decision analysis. I certainly would like to find in this volume one or two essays examining the impacts of stand interdependence on the optimal decision. Another important issue in multiple-use management, which is not covered in this volume either, is the valuation of non-market priced outputs and services. Yet I believe that this omission is well motivated, for there are two separate volumes in this series devoted to non-market valuation methods (R. T. Carson, ed. Direct Environmental Valuation Methods, Volumes I and II).The seven essays in Part IV deal with a set of forest economic and policy issues related to global warming and biodiversity conservation. Parks and Hardie (1995) examine the cost-effective subsidies to convert marginal agricultural land to forests for the purpose of carbon sequestration. Hoen and Solberg (1993) analyze the potential and cost-effectiveness of increasing carbon sequestration in existing forests by changing forestry practices. van Kooten, Binkley and Delcourt (1995) examine the effect of carbon taxes and subsidies on the optimal rotation age. The chapter from the Third Assessment Report of IPCC (2001) provides a comprehensive review of the literature on the ecological, environmental, social and economic aspects of carbon sequestration in terrestrial ecosystems. While forests and forest management could play an important role in mitigating climate change, increasing level of atmospheric dioxide and climate change would inevitably affect the productivity of forest ecosystems, thereby could have significant impacts on future timber growth, harvest and inventory as well as carbon storage in forest ecosystems. Joyce et al. (1995) present a framework for analyzing the potential effects of climate change on the forest sector. The remaining two essays in this part examine the costs and benefits of biodiversity preservation, respectively. Montgomery, Brown and Adams (1994) estimate the marginal cost of preserving the northern spotted owl. Simpson, Sedjo and Reid (1996) examine the expected value of the marginal species as an input to pharmaceuticals.The editor points out in the introduction chapter that there are many other important contributions that are not included in this volume, some of these are mentioned, others not. In addition to the few omissions noted earlier, several important economic and policy issues such as uneven-aged stand management, deforestation, international trade, sustainable forestry, forest recreation, wildlife management and so on are not discussed. Moreover, none of the journal essays published since 1997 is selected. That there are many other important contributions does not mean the essays included in this volume are less important, however. While each forest economist may present a different list of the most important papers, most (if not all) of the essays in this volume would appear on anyone's list. I strongly recommend this book for research scientists and graduate students of forest economics as an essential addition to their reference library.     

A review of recent developments and applications of partial equilibrium models of the forest sector

Recent history has seen an increase in the utilization of partial equilibrium based forest sector models to identify potential impacts of various policies or timber market shocks. These models are particularly useful in that they employ economic theory to capture the interaction of supply and demand in a framework where commodity prices are endogenous to the policy or shock simulated. We present recent developments and linkages between models and review applications of these models to forest policy questions over the previous decade. We conclude with a discussion of potential future directions for such research.     

Duck Hunting and Wetland Conservation: Compromise or Synergy?

Duck hunting is an issue — often controversial — that generates both benefits and costs to society. Hunters enjoy benefits from engaging in their sport, while those who have ethical concerns regarding the shooting of ducks endure costs. Some in the community fear that duck hunting puts pressure on the continued ecological viability of the hunted species, while others argue that the demand for hunting provides sufficient economic incentive for wetland conservation. Whether society as a whole should permit or restrict duck hunting is to some extent an empirical question: Are the costs to society of allowing duck hunting greater or less than the benefits it generates? Evidence presented in this paper addresses this question. The benefits enjoyed by people who hunt ducks in the upper south east of South Australia are estimated using the travel cost method. The ethical costs borne by the general community because of duck hunting are estimated using the choice modeling technique. Finally a threshold value analysis is used to assess the activities of Wetlands and Wildlife, a not‐for‐profit organization that manages wetlands in part for hunting.     

Estimating the aggregate value of forest recreation in a regional context

Public goods and services supplied by nature require active government intervention to ensure their provision. Nevertheless, prior to the implementation of any policy, planners should compare the costs and benefits caused by their decisions, a difficult task when policies and regulations are developed at a regional or national level (i.e. fire and pest control policies included in forests national plans), and their impacts spread out across a large number of people and ecosystems. In this context, although environmental economics has provided the necessary information for decision-making guidance related to site-specific interventions, little attention has been given to the information requirements of policies affecting large geographical areas, that is, to the estimation of an aggregate value for a specific region. The purpose of this paper is to improve current applications, inferring the recreational value of forests through the implementation of a discrete-count linked model including all the forest areas in the region of Mallorca (Spain).     

Lake States natural resource managers’ perspectives on forest land parcelization and its implications for public land management

Field-based public natural resource managers in the Lake States (MI, MN, WI) were surveyed for their perspectives on various aspects of private forest land parcelization. This includes their perceptions of recent changes in parcelization activity, drivers and impacts, mitigation strategies, and ability to influence parcelization. Their perspectives on the implications private forest land parcelization has on public land management were also sought. Across the Lake States, most public natural resource managers have witnessed an increasing frequency of forest land parcelization. They consider development potential and proximity to population centers to be the most influential driver of parcelization, with decreased timber supply and loss of recreational access on private land the most likely outcomes. The study documented important perceived linkages between private forest land parcelization and public land management, such as increased conflicts on public land, decreased access to public land, and increased demand for and cost of managing public land.     

Dual discounting in climate change mitigation in the forest sector

The efficiency of potential climate change mitigation is predicated on future costs and benefits and thus heavily influenced by the discount scheme. Dual discounting involves discounting carbon and monetary values differently; stand level modeling efforts show that it improves the profitability of afforestation projects. However, these stand level results may not hold across other age classes and stocking levels. Using a partial, spatial equilibrium model of the Norwegian forest sector, we analyze the impacts of a dual discounting scheme on climate change mitigation efforts. Dual discounting results in less mitigation efforts in the first decades but substantially higher long-term mitigation efforts.     

Designing hunting regulation under population uncertainty and self-reporting

A number of methods exist for estimating the size of animal populations. All methods generate an uncertain estimate of population size, and have different properties, which can be taken into account when designing regulation. We consider hunting regulation when the population size is uncertain and when the self-reported bag is used to estimate the population size. The properties of a population tax and a tax on self-reported bag are analyzed and we begin by considering a baseline situation with full certainty and no use of self-reporting for population size estimation. Here individual hunters self-report a bag on zero and a population tax alone can secure an optimum. Next we show that when facing uncertain population size, a risk-averse hunter will self-report part of the bag to reduce the uncertain population tax payment, making both tax instruments necessary for reaching an optimum. Finally, when self-reported bag is used to estimate population size, we also show that it is optimal for hunters to report a part of the bag and both instruments are again necessary for reaching an optimum.