Abstract
Forests deliver multiple benefits both to their owners and to wider society. However, a wave of forest pests and pathogens is threatening this worldwide. In this paper we examine the effect of disease on the optimal rotation length of a single-aged, single rotation forest when a payment for non-timber benefits, which is offered to private forest owners to partly internalise the social values of forest management, is included. Using a generalisable bioeconomic framework we show how this payment counteracts the negative economic effect of disease by increasing the optimal rotation length, and under some restrictive conditions, even makes it optimal to never harvest the forest. The analysis shows a range of complex interactions between factors including the rate of spread of infection and the impact of disease on the value of harvested timber and non-timber benefits. A key result is that the effect of disease on the optimal rotation length is dependent on whether the disease affects the timber benefit only compared to when it affects both timber and non-timber benefits. Our framework can be extended to incorporate multiple ecosystem services delivered by forests and details of how disease can affect their production, thus facilitating a wide range of applications.
Highlights
Forests supply a wide range of important ecosystem services such as the regulation of hydrological and carbon cycles (Carvalho-Santos et al, 2014; Cudlín et al, 2013); recreational and aesthetic values (Nielsen et al, 2007; Ribe, 1989); as well as the conservation of biodiversity (Johansson et al, 2013)
Where a disease arrives during a forest rotation the optimal rotation length, which maximises the NPV of the forest, is found when the marginal benefit of waiting for one more instant of timber growth and accruing of green payment, is equal to the value of the opportunities forgone and the marginal cost of the disease spreading further (Section 2)
In Macpherson et al (2016) we showed that when disease reduces the value of timber from infected trees, the optimal rotation length of a plantation forest is generally decreased if the infection spreads slowly, but delayed to the disease-free optimal rotation length if the infection spreads quickly
Summary
Forests supply a wide range of important ecosystem services such as the regulation of hydrological and carbon cycles (Carvalho-Santos et al, 2014; Cudlín et al, 2013); recreational and aesthetic values (Nielsen et al, 2007; Ribe, 1989); as well as the conservation of biodiversity (Johansson et al, 2013). The inclusion of non-timber benefits has become a cornerstone of optimal rotation length analysis, with studies examining the effect of including: the cost of maintaining the provision of recreational services (Snyder and Bhattacharyya, 1990); carbon sequestration, taxes or subsidies (Englin and Callaway, 1993; Price and Willis, 2011; Van Kooten et al, 1995); timber and carbon sequestration benefits while maintaining a given level of biodiversity in a single forest (Nghiem, 2014); and the interdependence of the provision of amenity services from adjacent forests (Koskela and Ollikainen, 2001; Swallow and Wear, 1993) These models generally depend on a function that describes the production of timber and non-timber benefits through time.
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