The allowable cut effect as a policy instrument in Canadian forestry

Abstract

The allowable cut effect, or ACE, is defined as an immediate increase in today's allowable cut of a timber management unit that is attributable to expected future increases in yields. In Canada, the ACE has been adopted by provincial governments in an attempt to encourage voluntary, private investments in silviculture on Crown forest lands. However, such policies have been generally ineffective. Potential reasons for their failure include the presence of other public silvicultural policies that crowd out private, ACE-motivated expenditures; rent (stumpage) collection provisions that do not allow tenure holders adequate financial returns on their investments; yield control provisions that do not impose significant constraints on industrial activity; costs of compliance with regulations to secure increased harvests; and the uncertainty surrounding the future of existing tenure arrangements.