A dynamic model for intertemporal allocation of old-growth forests in the Pacific Northwest

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Across the globe, continued policy debates regarding the management of old-growth forests center around the difficult task of balancing economic and ecological considerations. Though the forests of the Pacific Northwest United States are among the most studied old-growth ecosystems, ecological and economic analyses have yielded public land management directives that remain controversial. Specifically, the recently adopted Northwest Forest Plan lacks explicit goals for maintaining intergenerational equity for the use of forest resources and the diversity of old-growth ecosystems. Unlike previous studies which rely on monetary quantification of costs and benefits, this study develops and applies a conceptual framework for evaluating socially optimal Pacific Northwest old-growth forest utilization strategies. Conditions for the optimal management of old-growth forests are derived using dynamic programming. The objective function synthesizes relevant biological and economic attributes of the old-growth allocation problem. Results in the form of extraction paths are compared given social pressure for consumptive and non-consumptive benefits, as well as different planning horizons, rates of social time preference, and environmental variance. Lengthening the planning horizon results in a vast divergence of optimal policies in the absence of discounting. Extraction rates appear to approach zero as the planning horizon approaches infinity. While higher rates of social time preference increase the rate of extraction, forest stocks remaining at the terminal time period equal levels remaining with a lower discount rate. Increasing environmental variance results in a higher level of stock remaining at the terminal time period. This analysis, while specific to the old-growth controversy of the Pacific Northwest, does provide general guidelines for addressing similar problems of multiple uses of natural areas, particularly where such uses are mutually incompatible, or where one use may be irreversibly destructive to another.