Annual Allowable Cut Research Articles

An economic assessment of using the allowable cut effect for enhanced forest management policies: an Alberta case study

In Canada, forest policymakers are considering the allowable cut effect (ACE) as a potential mechanism to provide tenure holders with incentives to practice enhanced forest management. To investigate the incentives created by the ACE, this paper estimates returns to ACE investments for a trembling aspen (Populus tremuloides Michx.) - white spruce (Picea glauca (Moench) Voss) mixedwood forest in Alberta. A timber supply model is used to optimize harvesting schedules to maximize net present values over a 200-year planning horizon. A number of scenarios are investigated with variations in intensity of silvicultural investments, beginning age-class distributions, levels of flexibility around the allowable annual cut (AAC), calculations of AACs based on coniferous and mixedwood volumes, and green-up constraints. In our simulations, it was difficult to find positive returns to the ACE. Positive returns only occurred when operating under harvesting constraints with a mature starting forest and AAC calculations that ignored deciduous volumes. In those limited cases where there were positive returns to the ACE, returns were higher for extensive, rather than intensive investments. Combining these results with other potential impediments to the ACE, previously identified in the literature, the probability of tenure holders having incentives to undertake ACE investments is low.

An economic assessment of using the allowable cut effect for enhanced forest management policies: an Alberta case study

In Canada, forest policymakers are considering the allowable cut effect (ACE) as a potential mechanism to provide tenure holders with incentives to practice enhanced forest management. To investigate the incentives created by the ACE, this paper estimates returns to ACE investments for a trembling aspen (Populus tremuloides Michx.) - white spruce (Picea glauca (Moench) Voss) mixedwood forest in Alberta. A timber supply model is used to optimize harvesting schedules to maximize net present values over a 200-year planning horizon. A number of scenarios are investigated with variations in intensity of silvicultural investments, beginning age-class distributions, levels of flexibility around the allowable annual cut (AAC), calculations of AACs based on coniferous and mixedwood volumes, and green-up constraints. In our simulations, it was difficult to find positive returns to the ACE. Positive returns only occurred when operating under harvesting constraints with a mature starting forest and AAC calculations t...

Economic impacts of changes in the forestry sector: A case study of the Foothills region in Alberta

Economic impacts of a reduction in the annual allowable cut and in the price of forest products on the Foothills Model Forest regional economy are examined. A two-sector computable general equilibrium model is developed for the region to do this task. The results indicate that these changes cause significant negative impacts on the forest sector and on the local economy. Results show that other sectors of the economy will expand in response to the above changes in the forest sector. However, the expansion cannot offset the reduction in the forest sector and thus local communities sustain reduction in their income. The results are sensitive to the assumptions about markets for factors. Key words: economic impact analysis, CGE modeling, regional economics, community stability

Trading in the future: British Columbia's forest products compromise

The authors examine the commodity‐oriented nature of the British Columbia (BC) forest industry in the context of domestic policy changes and globalization. An analysis of primary data on the volume and value of wood products highlights the degree to which BC firms depend on the export of four products (softwood lumber, pulp, newsprint, and paper) for sale in three markets (United States, Europe, and Japan). This commodity‐oriented industrial approach has been negatively affected by allowable annual cut (AAC) reductions in BC consequent upon “falldown,” increased stumpage rates, the Forest Practices Code, and the Protected Areas Strategy. BC's forest sector is under threat also from lower‐cost companies benefiting from trade liberalization, national and regional forest industry development policies, lower production costs, and technological innovation. The report concludes that BC's commodity‐oriented forest industry will be unable to remain globally competitive as a result of increasing costs within BC and decreasing costs elsewhere.

Impact of timber-fee increases on British Columbia forest products companies: an economic and policy analysis

On 14 April 1994, the British Columbia government announced a new stumpage formula that, at then-expected product prices, increased the average charge by about $12/m3 and more than doubled the rate at which stumpage fees change when lumber prices change. Most of the increased revenues are reinvested in the forest sector by a new organization, Forest Renewal British Columbia (FRBC), created specifically for that purpose. Using standard event-study methodologies, this paper documents the net effect of the fee increases and new policy direction on British Columbia forest products companies. After controlling for firm-specific risk and the decline in the Toronto Stock Exchange that occurred at about the same time, the new stumpage policy extracted about $1.0 billion from shareholders of the firms studied, and perhaps $2.4 billion from all licencees (an amount roughly equal to the capitalized after-tax cost of the higher fees). The impact on individual firms is highly correlated with the allowable annual cut (AAC) in replaceable licenses each holds, with an average impact of about $33.3/m3 of AAC. The market appears to have discounted both the good news about offsets in impending timber-supply reductions that the creation of FRBC implies and the reductions in earnings risk that the new stumpage system provides. When added to the increased regulatory costs associated with the new provincial Forest Practice Code, the timber-fee increases appear to have fully depleted the value of holding British Columbia timber quotas.

Integrating woodland caribou needs and forestry: perspectives of Alberta's forest industry

Much of Alberta's woodland caribou (Rangifer tarandus caribou) range outside protected areas is subject to commercial forest management. In this paper, I discuss some perspectives of the forest industry regarding caribou-related issues. Six forest companies holding Forest Management Agreements (FMAs) in Alberta were polled. Forest managers were most concerned about 2 aspects of caribou management: reductions of annual allowable cut (AAC) that may be necessary to provide for caribou habitat needs; and management of public access. Perceived information gaps fell into 3 categories: caribou demographics (population size, trends and densities); primary limiting factors of caribou populations (including the influence of human activity); and caribou habitat requirements (including the effects of timber harvest on caribou habitat). Increased costs associated with consideration of caribou have been incurred at the planning and operational levels. However, those costs have been low, primarily because much proposed harvest in caribou ranges has been deferred. Costs are expected to increase substantially in the future as timber from caribou ranges is required to meet harvest objectives. Other issues identified included: the desire for an adaptive management approach to caribou-forestry interactions; the need to incorporate natural-disturbance-regime models into forest planning; consideration of the cumulative effects on caribou of all industrial and recreational activities; and unmanaged harvest by First Nations people. A list of caribou-related projects conducted or supported by forest companies in Alberta during the past 5 years is provided.

The politics of sustained yield forest management in Malaysia: Constructing the boundaries of time, control and consent

Despite its lack of success in countries across the globe, scientific or sustained yield forestry remains the dominant discourse in tropical forestry. The main concern of this paper is to provide a conceptualisation of the inherent technological difficulties in sustained yield technology. In doing so, the paper goes to the heart of the debate surrounding the construction of scientific knowledge and the nature of technological development. The examples used are from Peninsular Malaysia and the East Malaysian state of Sarawak. However, the issue of science and the politics of scientific knowledge production, as well as the contingent nature of technological development, have more general applicability. Moreover, the examples from Malaysia may be equally useful in countries that are similarly mired, in coping with the effects of forest resource ‘development’. Our contention in this paper is that sustained yield categories, such as the annual allowable cut, emerge from a whole network of assumptions and negotiations that are both social and technical. Since scientific categories are often under-determined, they are subject to contestation. The paper ends by outlining the way in which sustained yield knowledge claims are being contested by forces encapsulated under the umbrella of sustainable forest management.

Growth and yield of a tropical rain forest in the Brazilian Amazon 13 years after logging

Successive inventories of a silvicultural experiment in terra firme rain forest within the Tapajós National Forest in the Brazilian Amazon are examined to provide guidelines for operational forest management on a sustainable basis. The experiment was logged in 1979 without additional silvicultural treatment, but included protection from further logging and encroachment (‘log and leave’). Thirty-six permanent plots established in 1981 were remeasured in 1987 and 1992. Logging changed the canopy structure and altered the composition of the stand, reducing the number of shade tolerant species and stimulating light demanding species. There was a net increase in stem number and stand basal area during the 11 year observation period, and this trend also holds for most of the individual species. The stand basal area 13 years after logging was about 75% of that in a comparable unlogged forest. Logging stimulated growth, but this effect was short-lived, lasting only about 3 years, and current growth rates are similar to those in the unlogged forest. Between the first and second remeasures, average diameter increment decreased from 0.4 to 0.2 cm year −1, mortality remained relatively constant at 2.5% year −1, while recruitment (at 5 cm diameter at breast height) decreased from 5 to 2%. Total volume production declined from approximately 6 to 4 m 3 ha −1 year −1, while commercial production remained about 0.8 m 3 ha −1 year −1. New commercial species increased the commercial volume in 1992 from 18 to 54 m 3 ha −1, and the increment to 1.8 m 3 ha −1 year −1. Results from this experiment provide the first quantitative information for management planning in the Tapajós Forest, and may guide the choice of cutting cycle and annual allowable cut. Silvicultural treatment to stimulate growth rates in forest areas zoned for timber production should be considered as a viable management option. Extrapolations of these results to an anticipated 30–35 year cutting cycle must be interpreted with caution. Ongoing remeasurement and analysis of these and other plots over the next 30 years or more are necessary to provide a stronger basis for management inferences.

A general equilibrium analysis of the economic impact of a reduction in harvest levels in British Columbia

This paper examines the economic and social consequences of possible reductions in the Annual Allowable Cut (AAC) in the province of British Columbia. Following a review of studies of the role of the forest industry in the economy of British Columbia, a general equilibrium model is presented to examine the economic impact of AAC reduction where prices of forest products are allowed to fluctuate. While the studies reviewed and this study use different methodologies, the conclusion that emerges is robust: the economic impact of AAC reduction is significant and negative. The social costs in terms of unemployment and community stability/survival are even higher. The paper concludes with a set of recommendations intended to ensure that decisions concerning harvesting reflect comprehensively the costs and benefits involved in terms of the timber and non-timber values involved.

A review of innovations in disease and insect management and control

Insects, diseases and fire annually cause losses equal to one-third of the allowable annual cut in British Columbia and can directly affect exports and movement of forest products. While salvage, at least partial, of the merchantable mortality has been the traditional practice, innovations in forecasting, detection and control are increasing forest management options. Examples are given of technological advances in nursery production, data analysis and interpretation using geographic information systems (GIS) and models, insect pheromones and biological controls, and quarantine requirements imposed by concerns for potential pests.

Comprehensive wilderness protection in British Columbia: An economic impact assessment

This study develops an economic model for assessing the impacts of a comprehensive wilderness proposal on the British Columbia forest industry. The results indicate that, overall, the impacts are relatively small, involving a 3.5% reduction in the provincial allowable annual cut, with regional impacts ranging from 1.9% to 5.2%. Some ways to offset these impacts are discussed, since the ability to offset employment loss significantly influences the feasibility of wilderness designations. The study highlights the feasibility of developing quantitative models for assessing the economic impacts of land use options. Extending the model developed in this paper by integrating growth and yield models with a geographical information system and an input-output model would facilitate quick and flexible assessments of alternative land use strategies. Development of such a framework is essential for resolving forestry conflicts.

Assessing the sustainability of Canadian forest management: Progress or procrastination?

Despite its lack of success in countries across the globe, scientific or sustained yield forestry remains the dominant discourse in tropical forestry. The main concern of this paper is to provide a conceptualisation of the inherent technological difficulties in sustained yield technology. In doing so, the paper goes to the heart of the debate surrounding the construction of scientific knowledge and the nature of technological development. The examples used are from Peninsular Malaysia and the East Malaysian state of Sarawak. However, the issue of science and the politics of scientific knowledge production, as well as the contingent nature of technological development, have more general applicability. Moreover, the examples from Malaysia may be equally useful in countries that are similarly mired, in coping with the effects of forest resource ‘development’. Our contention in this paper is that sustained yield categories, such as the annual allowable cut, emerge from a whole network of assumptions and negotiations that are both social and technical. Since scientific categories are often under-determined, they are subject to contestation. The paper ends by outlining the way in which sustained yield knowledge claims are being contested by forces encapsulated under the umbrella of sustainable forest management.

An operational, spatially constrained harvest scheduling model

A Monte Carlo integer programming algorithm was developed to generate short-term (25-year), spatially feasible timber harvest plans for a New Brunswick Crown license. Solutions for the short-term plan are considered feasible if they meet spatial and temporal harvest-flow and adjacency constraints. The solution search procedure integrates a randomly generated harvesting sequence and checks of harvest-flow and adjacency constraints. The model was used to determine the annual allowable cut under three constraint formulations. The three formulations represented increasing levels of adjacency constraints, from no constraints to levels similar to current provincial requirements. The annual allowable cut under the most strict constraint formulation was reduced by 9% from the unconstrained formulation, for a given mapping strategy of a long-term harvest schedule. These applications of the model indicate that it is suitable for spatially constrained harvest scheduling on Crown licenses in New Brunswick.

The Opportunity Cost of Reduced Timber Harvests Resulting from Coal Mine Development: A Case Study

This paper presents a methodology for determining the opportunity cost of a temporary removal of forested land from timber production. The value of forested land in a jurisdiction requiring sustained timber yield is the net value of the contribution of that land to the annual allowable cut. This methodology is used in a case study in west central Alberta to determine the opportunity cost of the removal of land from timber production to allow for coal extraction.

Women Fuelwood Carriers and the Supply of Household Energy in Addis Ababa

In Ethiopia, about ninety-three percent of the energy requirement is in the form of firewood, charcoal, dung, and crop residues. Of an estimated annual per capita consumption of 205 kilograms of oil equivalent, only 6.5 percent comes from petroleum products (United Nations Development Programme / World Bank 1984). The gross energy supply in the country, based on 1982 estimates, is about 8.9 million tonnes, and the final consumption is 8 million tonnes. The domestic sector consumes 92.8 percent of the energy (7 436 000 tonnes in 1982) whereas industry and transport take 6.5 percent. In 1980 about 24 million cubic metres of fuelwood was consumed whereas the national allowable annual cut was estimated to be only 13 million cubic metres (Tekele Haimanot 1984). The deficit is covered by forest clearing and overcutting. The impact of such an accelerated rate of deforestation on the environmental, economic, and social well-being of the society is far-reaching. At present, the city of Addis Ababa is faced with a serious fuelwood shortage. Considering forests within a radius of one hundred kilometres of Addis Ababa, the demand for fuelwood exceeds the supply by about seventy-five percent (Ethiopian National Energy Committee 1981). To date, this imbalance has resulted in an accelerated destruction of the poorly managed forests around Addis Ababa. This deteriorating situation will aggravate the problems of shortage and cost of woodfuels for household cooking in the city. The supply of fuelwood to the city comes from both the state and the private sectors. The government transports fuelwood from a radius of various distances and distributes it to city dwellers, using depots located at different zones in the city. The private suppliers include not only peasant associations around the city who own and manage the forests but also fuelwood carriers who either buy or collect biomass fuels and supply the city and private stores in various kebeles (sub-districts). Thus, while the Wood and Charcoal Products Processing and Marketing Enterprise (ECPPME) under the Community Forest and Soil Conservation Development Department (CFSCDD) supplies about twenty percent of the city's requirement, using its thirty-five depots, the major supply of fuelwood to Addis comes from fuelwood carriers, peasants, and licensed traders. Therefore, these fuelwood sources needed to be studied properly.

What Does the Forest User Require from the Forest Manager

The forest users' needs can be stated simply: "A continuous and sustained supply of wood at a constant real cost".Forest manufacturing is highly capital intensive. A pulp mill costing $500 million needs five 65-million-dollar sawmills and five 35-million-dollar logging operations to supply the necessary volume of chips. The total costs $1 billion and $150 million per year must be put back into the business. To obtain the money, there must be not only a secure forest tenure, but for Crown lands, an incentive for wood users to make a solid commitment to forest management.The logger needs a year-round operation with relatively consistent timber types and topography. The sawmiller needs wood of consistent size and quality at an economical hauling distance from the mill. Mills will go under if hauling distances increase year by year, hence the need for total regeneration and rehabilitation of the backlog of NSR Land. The pulp mills require raw material of consistent quality to sell pulp on the open market.Threats to these requirements are lack of regeneration of denuded lands, ever decreasing annual allowable cuts with increased haul distances, and withdrawal of forest land from production.The solution is to provide incentives for the user to manage the forests under contract with the owner. Then there will be long-term management — a time frame not compatible with the fiscal policies of politicians and hence governments. Key words: forest management, forest industry, financial requirements, forest economics.

Management of mangrove exploitation in Indonesia

In Indonesia mangrove vegetation covers an area of about 3.8 million hectares. The export value of charcoal, logs. woodchips and other mangrove products was US$4.1 million in 1978. Until 1970 the allocation of mangrove resources was handled by provincial authorities. Since 1970 concessions for areas greater than 100 ha have been controlled by the central government. The sites under central government concession cover an area of 455 000 ha. This area is divided between 13 major concessions permitting a total maximum annual allowable cut of 599 200m 3. In areas under concession, regulation requires that a system of selective cutting combined with seed-tree-based natural regeneration should be applied. A clear-cutting system has been recommended to increase log production. Preliminary studies in different regions show considerable differences in the regeneration process. In Kalimantan it has been shown that. following clear-cutting in alternative strips, regeneration consisted primarily of Rhizophora whilst that of Bruguiera was minimal. Preliminary observations in Sulawesi have shown that no mangrove of commercial value has regenerated. Instead a succession of undergrowth comprising Acanthus ilicifolius and Acrostichum aureum has appeared. The Directorate General of Fisheries of the Indonesian government has recently recommended the establishment of a 400 m-wide ‘green belt’ of mangrove along all shores where mangrove should normally be found and where conditions are still favourable for mangrove growth. The Directorate General of Forestry is also seeking to re-establish former mangrove areas for production forest. Conflicts have arisen in the implementation of these policies, particularly in locations occupied by brackish water fishponds. A compromise in the form of mangrove cum fish culture was introduced. However, the success of this type of culture is questionable.

An Integrated Wildfire and Forest Inventory Management Information System

In 1976 Manitoba established a computerized wildfire recording system which is integrated with the provincial forest inventory data banks. It is designed not only to facilitate data collection but also to provide estimates of timber volume loss records for fire history appraisals and to assist in improved forest management.The system enables foresters to determine volume losses with respect to such parameters as species, age class and site. It provides computer stored fire data which can be used to update forest inventory area and volume statistics, reforestation for second growth management records, and the recalculation of annual allowable cuts. Data for other resource concerns such as wildlife and watershed management can also be obtained.

Does total growth equal allowable annual cut

Does total growth equal allowable annual cut