Can hybrid poplar save industrial forestry in Canada?: A financial analysis in Alberta and policy considerations

Abstract

Intensifying forest management has the potential to alleviate pressures of competing land uses, maintain global competitiveness in the face of increasing exotic plantations, and increase the value of the boreal forest resource. Yet, such initiatives have largely been stymied in Canada's boreal regions because intensive forest management of native tree species is not financially viable. The yield curve estimation and financial analysis conducted in this paper, however, suggests intensive management of hybrid poplar in Alberta could be financially viable. The financial viability of such initiatives will depend heavily on the policies that governments use — such as priority-use zoning — to encourage or discourage such trends. But before reforming policy, decision-makers must trade off the environmental implications of industrial plantations of exotic species with the potential gains from priority-use zoning. Key words: soil expectation value, optimal economic rotation, hybrid poplar, priority-use zoning, intensive forest management