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The ability to predict growth and potential yield is essential for planning forest management. Here we developed a narrow size-class diameter model to simulate growth in a mature plantation (age 42 years) of big-leaf mahogany (Swietenia macrophylla King) in a subtropical moist forest in Puerto Rico. We calculated optimal rotation age by means of the biological and economic criteria. The analyses involved diameter measurements over 31 years and a variety of contrasting economic scenarios, which were evaluated by means of the Faustman formula and sensitivity analyses. The optimal biological rotation was 90 years while the optimal economic rotation was 42 years in most of the scenarios, regardless of wood prices and costs of reforestation. Conspicuous changes in the optimal economic rotation were only observed under low interest rates, in which it was prolonged to around 80 years, close to the optimal biological rotation. Abundant natural regeneration and a prolonged biological rotation suggest that other silvicultural systems, rather than traditional clear-cutting and replanting could be adopted. However, to evaluate alternative silvicultural strategies we would need to improve our ability to predict growth. This would require expansion of our database to include information on growth conditions of individual trees and young tree dynamics, as well as size and growth of other species, to model natural regeneration and competition.

Pine forest management today has not already reached its optimal state. The abnormal pine stand structure will cause a decrease in the production of pine resin. This study aimed to determine the optimal rotation of pine plantation forest and formulated the harvest scheduling to ensured optimal resin production. The determination of optimal rotation was conducted by modifying the Faustman formula to be applied on the condition in forest management in Perhutani. Simulation optimization of harvest scheduling was conducted by linear programming. Optimal rotation of pine forest plantation consists of timber rotation and resin rotation. The highest net present value of timber was obtained at 25 year cycles and the highest net present value of the resin was obtained at 35 year cycles. The inclusion of resin benefit was resulting in lengthening the optimal rotation age. The abnormal stand structure was causing the fluctuations of pine resin production. Thus, the efforts to improve it was by applying the harvest scheduling framework. This study concluded that harvest scheduling which conducted over eight periods has made the abnormal stand structure into the normal forest condition. The existence of normal forest condition led to the certainty of pine resin production sustainability.

This study aimed to estimate the optimal forest rotation age for tropical plantations of a native tree species, Canarium album (Lour.) under the management of high, medium, and low income groups of farm households of Vietnam. The results suggest that: (i) the optimal rotation age for the low income group is longer than that for the high income group; (ii) low income farmers are more sensitive in terms of the land expectation value to changes in discount rate; (iii) low income farmers gain less if the carbon price increases; and (iv) the carbon payment scheme at the start of a rotation is more financially attractive to forest farmers, but the carbon payment scheme at the end of a rotation is more advantageous in terms of forest biodiversity. These findings lead to potential policy implications for forest management for the provision of multiple ecosystem services in the context of a developing country, demonstrating a tradeoff between forest income and biodiversity conservation. While an increase in carbon prices would benefit forest farmers, we also suggest that these farmers could be compensated for their income losses or rewarded to maintain or increase forest biodiversity. However, relatively greater attention could be paid to compensating low income farmers as they potentially lose more with an increase in discount rate and gain less with an increase in carbon price.

It is widely recognized that enhancing forest carbon sequestration (FCS) can be an effective approach for mitigating climate change. Given the uncertainty about carbon pricing and the outcomes of FCS management, household perceptions of FCS management will be heavily dependent upon their risk attitudes, especially in developing countries with rich forest resources. Using a survey of 200 smallholder forest managers in Zhejiang Province in China and a risk experiment, this paper analyzes how the risk attitudes of households drive their FCS supply. We simulated the carbon supply with different risk attitudes of households based on a revised Faustmann model and a sensitivity analysis. A key finding is that compared with a timber benefit only, FCS management will generate more investment value. However, households have little incentive to change their harvest decision-making when the carbon price is low. Among the three identified risk attitude groups, although they have the same optimal rotation age when the carbon value is considered, their carbon supply per hectare is different due to difference in their planting densities. Also, the rotation age with FCS management and the FCS supply per hectare do not change significantly unless there is a substantial change in the carbon price, the management costs and the discount rate for all three risk attitude groups completely.

The harvest rotation issue: M. Faustmann (1848), calculation of the value which forest land and immature stands possess for forestry B. Ohlin (1921), concerning the question of the rotation period in forestry W.R. Bentley, D.E. Teeguarden (1965), financial maturity - a theoretical review D. Klemperer (1976), impacts of tax alternatives on forest values and investments P.A. Samuelson (1976), economics of forestry in an evolving society J.S. Chang (1982), an economic analysis of forest taxation's impact on optimal rotation age W.J. Reed (1984), the effects of the risk of fire on the optimal rotation of a forest K-G. Lofgren (1985), effects on socially optimal rotation period in forestry of biotechnology improvements in the growth function R.J. Brazee, R. Mendelsohn (1988), timber harvesting with fluctuating prices E. Koskela (1989), forest taxation and timber supply under price uncertainty and perfect capital markets. Timber supply - planted forest and the optimal drawn-down: H.J. Vaux (1973), how much land do we need for timber growing M. Clawson (1979), forest in the long sweep of American history P. Berck (1979), the economics of timber - a renewable resource in the long run K.S. Lyon (1981), mining the forest and the time path of the price of timber K.S. Lyon, R.A. Sedjo (1983), an optimal control theory model to estimate the regional long-term supply of timber. Multiple use and nontimber outputs: R. Hartman (1976), harvesting decision when a standing forest has value S.K. Swallow, P.J. Parks, D. Wear (1990), policy relevant nonconvexities in the production of multiple forest benefits. Global issues: P.J. Parks, I.W. Hardie (1994), least cost forest carbon reserves - cost effective subsidies to convert marginal agriculture land to forests H.F. Hoen, B. Solberg (1994), potential and economic efficiency of carbon sequestration in forest biomass through silvicultural management G.C. Van Kooten, C.S. Binkley, G. Delcourt (1995), effect of carbon taxes and subsidies on optimal forest rotation age and supply of carbon services IPCC (2001), technical and economic potential of options to enhance, maintain and manage biological carbon reservoirs and geo-engineering L.A. Joyce, J.R. Mills, L.S. Heath, A.D. McGuire, R.W. Haynes, R.A. Birdsey (1995), forest sector impacts from changes in forest productivity under climate change C. Montgomery, G. Brown Jr, D.M. Adams (1994), the marginal cost of species preservation - the Northern Spotted Owl R.D. Simpson, R.A. Sedjo, J. Reid (1996), valuing biodiversity for pharmaceutical research.

Maritime pine (Pinus pinaster) is the most important conifer species in France in terms of wood production. It is mostly cultivated in even-aged monoculture stands in the Landes forest. These plantations are exposed to multiple biotic and abiotic risks: most importantly the cyclical outbreaks of a defoliator, the Pine Processionary Moth (PPM, Thaumetopoea pityocampa), and storms causing large windthrown. This study aims to compute the optimal rotation age and land expectation value (LEV) for maritime pine plantations in order to assess the impact of these disturbances. Using stochastic simulation methods, we simulate multiple scenarios combining different disturbance intensities. Our results show that both disturbances reduce LEV individually. When combined together, the two disturbances generate subadditive losses (i.e. combined damages are smaller than the sum of the damages from each disturbance individually). The impact on the optimal rotation length, however, is different for the two analysed risks: While storms tend to reduce the optimal harvest age, PPM tends to increase it. Overall, the impact of PPM on the rotation length prevails and, here, risks increase rather than decrease the optimal rotation length. Thinnings play an important role. They do not only increase profitability but also constitute an effective hedging strategy against both risks since they mitigate the negative impacts of PPM and storm disturbances for all the tested scenarios.

International audience; AbstractKey messageThe concept of expected losses is an appropriate measure for integrating risk in the determination of the optimal rotation period and choice of tree species.ContextNatural threats are challenging forest management decisions. Essential decisions about the optimal length of a harvest period are often taken without considering risks.AimsHere, a practical and easy to apply way to integrate risk in these decisions is shown. Furthermore, it is seen how the rotation period changes according to the risk-type and risk-level.MethodsThe marginal principle of Preßler’s indicator rate is developed further by including the concept of expected losses, leading to an optimal harvest age under risk. The application of the new formula is shown by a simulation, which also visualises the influence on the optimal rotation age.ResultsWhether risk influences the optimal harvest age compared to a risk free solution, depends on the relationship between expected losses in terms of land rent of the succeeding stand and expected losses in terms of value growth of the existing stand. If they are equal, the rotation age stays. If the expected loss on value growth is bigger than on land rent, the rotation period will be shorter, while it will be longer if the relation is inverse.ConclusionThe concept of expected losses can be applied to practically determine the optimal rotation period under risk.

Enhancing carbon sequestration is crucial to mitigate rising global levels of greenhouse gases, and for developing countries, carbon sequestration may also provide economic benefits via international carbon trading schemes. This study aimed to determine the optimal management strategy for tropical planted forests when timber and carbon sequestration are valued. The survey data were collected from 291 household foresters, who were growing Eucalyptus urophylla and Acacia mangium in Yen Bai Province, Vietnam. The regression exercise suggests that financial status was negatively correlated with forest management practices, and ethnicity and financial status were correlated with carbon sequestration management. The survey results suggest that the mean rotation age employed by household foresters is five years. However, the optimization modelling suggests that the optimal rotation age for maximizing net present value is greater than nine years. The differences between current practices and optimal practices therefore favour a role for government policy interventions.

This 4-page fact sheet written by Andres Susaeta and Chris Demers and published by the UF/IFAS School of Forest Resources and Conservation provides a guide for forest landowners, managers, and stakeholders in conducting a valuation of timber investments. It reviews and provides examples of two different approaches for determining the optimal rotation age of even-aged forest stands. These methods can help forest landowners and managers in making forestry investment decisions. https://edis.ifas.ufl.edu/fr424

Biodiversity loss is a major problem in terms of loss of genetic and ecosystem services and more specifically via impacts on the livelihoods, food security and health of the poor. This study modeled forest management strategies that balance economic gains and biodiversity conservation benefits in planted tropical forests. A forest-level model was developed that maximized the net present value (NPV) from selling timber and carbon sequestration while maintaining a given level of biodiversity (as per the population density of birds). The model was applied to Eucalyptus urophylla planted forests in Yen Bai Province, Vietnam. It was found that the inclusion of biodiversity conservation in the model induces a longer optimal rotation age compared to the period that maximizes the joint value from timber and carbon sequestration (from 8 to 10.9 years). The average NPV when considering timber values plus carbon sequestration was 13 million Vietnamese Dong (VND) ha− 1 (765 USD ha− 1), and timber, carbon sequestration and biodiversity values were 11 million VND (676 USD) ha− 1. Given this differential, governments in such tropical countries may need to consider additional incentives to forest owners if they are to encourage maximizing biodiversity and its associated benefits. The results also have some implications for implementing the climate control measure of “Reducing Emissions from Deforestation and Forest Degradation-plus (REDD +)” in developing countries, i.e., payment for carbon sequestration and biodiversity benefits in planted forests.

There are at least four physical levels of forest management and planning where decisions must be made: at the tree-level, the stand-level, the forest-level, and the landscape level. With each level, the management issues grow in size and scope, and decisions made at each level may be interconnected as well. However, tree-level decisions and stand-level decisions are not necessarily complementary; neither are stand-level decisions and forest-level decisions. This chapter concerns tree- and stand-level decisions and how a landowner may want to maximize the volume or value produced from a tree or a stand. Forest-level decisions are considered in forthcoming chapters. These typically are developed for one landowner or organization. Landscape plans can involve multiple landowners or organizations. Optimal plans of action are those where the schedule of activities will best meet the objectives of the landowner within the scope of their perceived physical level of forest management. Of course, a number of constraints may guide the development of an optimal plan. In an effort to use resources wisely, we need to understand how to develop guidelines for field implementation of activities, and an optimal solution to a management problem is a reasonable starting point. In addition, landowners not only may want to understand the best course of action for the management of their land, but also to compare the optimal plan to several alternatives in an effort to understand the associated trade-offs.

Using forest for carbon sequestration is widely accepted as an important strategy to mitigate climate change.Using data collected from rural households′ survey in Zhejiang and Jiangxi,Faustmann model was applied to investigate the optimal rotation age and forestland expectation value between traditional timber management and joint timber and carbon management for Chinese fir.Carbon supply curve was developed and sensitivity analysis was conducted with various interest rate and carbon price.It was found that the optimal rotation of Chinese fir in the joint management does not change from traditional timber management due to the fact that timber price is much higher than carbon price,suggesting that optimal decision for Chinese fir management will not change significantly and carbon sequestration supply from current Chinese fir forestland would not increase significantly within a large range change of carbon price.However,including carbon value would significantly increase the land value for forest management against alternative land uses,and will expand the forest area,which also increase the carbon storage in the expanded forestland.

This study modelled the potential biodiversity benefits and the opportunity costs of a patch-clear-cutting strategy over a clear-cutting strategy for Pinus radiata in New Zealand. Patch-clear cutting is a special case of clear cutting involving the removal of all the trees from strips or patches within a stand, leaving the remainder uncut or clear cutting a series of strips or patches. A forest-level optimisation model was extended to include uncertainty in timber growth, plant diversity, and cutting costs. Using a species-area relationship and economies of cutting scale, the net present value and optimal rotation age under alternative management strategies were calculated. Results suggested that the optimal rotation ages were similar (24 and 25 years) for the two cutting strategies. Patch-clear cutting provided higher biodiversity benefits (i.e., 59 vs. 11 understorey plant species) with an opportunity cost of 27 NZD (18 USD) per extra plant species or 1250 NZD (820 USD) ha−1. However, the true benefits of patch-clear cutting would be even greater if other benefits of stand retention are included. Our research can potentially inform local decision making and inform international systems of payment for environmental services, such as the REDD+ (Reducing Emissions from Deforestation and Forest Degradation) program, to conserve biodiversity in developing countries with plantation forests.

In the 1990s, an expansion of small-scale (farm) forestry in medium to low rainfall areas was considered to be an important part of increasing the national forest estate but it remains a very minor source of timber, largely confined to the higher rainfall areas. In most areas, returns from timber are much less than for alternative land uses, even with low discount rates. If however, there are additional returns from plantation grazing and carbon sequestration and there are other potential management gains, multiple use plantations may be more attractive. The goal of this study is to estimate the net present values of multiple use spotted gum plantations in a medium rainfall area of southeast Queensland. For the case study, production, carbon sequestration and emissions data were supplemented by formal and informal interviews with landholders, sawmill staff and government extension personnel. Forest inventory, biomass and soil sampling, and stakeholder interviews were used as sources of primary data. The costs and benefits data were converted into monetary terms and discounted to produce net present values. Evaluations in this study identify the optimal rotation age of plantations to be 33–34 years. This is the case if including carbon and stock values, and using either farm- or factory-gate timber prices. The net present value increases significantly however if farmers harvest the trees themselves. In addition, at harvesting age, it was found that carbon and stock had the potential to account for 19.2 and 11.4 % respectively of the total returns from spotted gum plantations. Policy initiatives to support the farm forestry sub-sector should include pricing greenhouse gas emissions and developing and strengthening farmers co-operatives and marketing institutions to enhance farmers’ bargaining power.

A classical problem in forest economics is the determination of the optimal rotation age. It is commonly acknowledged that Martin Faustmann and Max Robert Pressler contributed the most to the solution of this problem. Faustmann formulated the renowned land expectation value formula, which laid the foundation for economic analyses of the optimal rotation problem. He also provided several hints on how to correctly solve the problem. Pressler's work focused on the growth of the capital in a forest stand. He invented the concept of Indicator Per Cent, and argued that the Indicator Per Cent should be used to guide forestry decision-making. Pressler correctly stated how to use the Indicator Per Cent to determine when a stand should be harvested. However, his suggestions about the choice among silviculture options indicate that he did not fully understand the economic implication of the Indicator Per Cent.

This paper proposes a discrete-time type timber harvesting model for simultaneously determining (i) the optimal quantity of seedlings to be planted, (ii) the optimal quantities of timber harvested by thinnings, and (iii) the optimal rotation age. With the help of Microsoft Excel Solver, a generalized reduced gradient algorithm, numerical examples are developed to evaluate the impact of the variations in the quality level of a forest site on the optimal harvest strategy. It is shown that the level of optimal rotation age and optimal quantity of seedlings to be planted can individually exhibit non-monotonicity to the increase in site quality.

Healthy forests and enhanced habitat for wildlife is a growing concern among public and policy makers. These concerns have led to substantial interest in promoting various regulatory and voluntary compliance policies to further biodiversity on private forests. These policies, however, might result in additional cost to forestland owners. In this paper, we estimate the opportunity cost of adopting various biodiversity-friendly forest practices. We do this in the context of slash pine, a dominant commercial tree plantation species in Florida. Results suggest that prescribed burning, invasive species control, maintaining streamside buffer zones, and extending timber harvest beyond the optimal rotation age would significantly decrease the profitability of slash pine forestry. If the major objective of landowners is to maximize profits, results indicate that they are less likely to adopt these practices at socially desirable levels without a policy support. More specifically, results suggest that an annual payment of $38–83 per hectare is required for landowners to adopt these practices. The paper further argues that application of mere command-and-control approaches to implement these practices may result in conversion of private forests to other competitive land uses.

Populations of northern bobwhite (Colinus virginianus) have declined significantly over the past 50 years, and the primary factor contributing to this decline has been the loss of habitat. Forest landowners who are concerned with providing bobwhite habitat as well as generating revenue from timber should balance the silvicultural requirements of timber production with the biological needs of the bobwhite. The goal of this study was to determine the economic tradeoffs between bobwhite and timber management and how to minimize loss or maximize profit when managing for bobwhite and timber simultaneously. I performed discounted cash flow analyses, calculated land expectation value, and determined the financially optimal rotation age and optimal timing and intensity of thinnings for loblolly pine (Pinus taeda) plantations under specific management objectives. My results show that the annual per-hectare economic gains of managing for both bobwhite and timber ranged from US$19.27 to $41.37 on site index 50 land, and ranged from $32.63 to $50.02 on site index 90 land. My analysis indicates that bobwhite management provides an investment opportunity to landowners whose low-productivity sites would be unprofitable if timber is the only product. My study provides an example of integrating multiple uses of goods and services in a way that maximizes economic returns and aids land managers in producing better habitat for bobwhite.

Accounting for carbon storage and the albedo effect through Payments for Ecosystem Services (PES) or manda- tory offset permits aims to internalize the environmental externalities of forest management. This can shift the economically optimal rotation age, and incorporate rents for a wider range of ecosystem service offerings. A mixed stand economic optimization model was used to determine the optimal stand mixture and inter-species climate regulation trade-offs. Mixed forest dynamics between deciduous silver birch (Betula pendula Roth.) and coniferous Norway spruce (Picea abies Karst.) were evaluated. The sensitivity of our results to the absolute species-specific differences in albedo parameter values was also conducted. Results indicated that a synergistic climate regulation trade-off between the two species exists. The optimal rotation for the combined carbon stor- age and albedo effect was equivalent to that of the carbon storage only case. Differences in absolute albedo im- pacts were most sensitive at high discount rates, for ‘climate only’ management, and over increasing offset prices. These results demonstrate the importance of parameter certainty in the promotion of PES in forestry. They also show that mixed stands can promote more efficient trade-offs between forest ecosystem service offerings and provide a basis for diversifying between ecosystem functions.

This study aimed to estimate the optimal forest rotation age for tropical plantations of a native tree species, Canarium album (Lour.) under the management of high, medium, and low income groups of farm households of Vietnam. The results suggest that: (i) the optimal rotation age for the low income group is longer than that for the high income group; (ii) low income farmers are more sensitive in terms of the land expectation value to changes in discount rate; (iii) low income farmers gain less if the carbon price increases; and (iv) the carbon payment scheme at the start of a rotation is more financially attractive to forest farmers, but the carbon payment scheme at the end of a rotation is more advantageous in terms of forest biodiversity. These findings lead to potential policy implications for forest management for the provision of multiple ecosystem services in the context of a developing country, demonstrating a trade off between forest income and biodiversity conservation. While an increase in carbon prices would benefit forest farmers, we also suggest that these farmers could be compensated for their income losses or rewarded to maintain or increase forest biodiversity. However, relatively greater attention could be paid to compensating low income farmers as they potentially lose more with an increase in discount rate and gain less with an increase in carbon price.

The Faustmann forest rotation model is a celebrated contribution in economics. The model provides a forest value expression and allows a solution to the optimal rotation problem valid for perpetual rotations of even-aged forest stands. However, continuous forest cover forest management systems imply uneven-aged dynamics, and while a number of numerical studies have analysed specific continuous cover forest ecosystems in search of optimal management regimes, no one has tried to capture key dynamics of continuous cover forestry in simple mathematical models. In this paper we develop a simple, but rigorous mathematical model of the continuous cover forest, which strictly focuses on the area use dynamics that such an uneven-aged forest must have in equilibrium. This implies explicitly accounting for area reallocation and for weighting the productivity of each age class by the area occupied. The model allows for a simple expression for forest value and the derivation of conditions for the optimal rotation age. The model also makes straightforward comparisons with the well-known Faustmann model possible. We present results for unrestricted as well as area-restricted versions of the models. We find that land values are unambiguously higher in the continuous cover forest models compared with the even-aged models. Under area restrictions, the optimal rotation age in a continuous cover forest model is unambiguously lower than the corresponding area restricted Faustmann solution, while the result for the area unrestricted model is ambiguous.

We extend existing stand-level models of forest landowner behavior in the presence of fire risk to include the level and timing of fuel management activities. These activities reduce losses if a stand ignites. Based on simulations, we find the standard result that fire risk reduces the optimal rotation age does not hold when landowners use fuel management. Instead, the optimal rotation age rises as fire risk increases. The optimal planting density decreases. The level of intermediate fuel treatment, but not its timing, is sensitive to the magnitude of fire risk. Cost-sharing is shown to be an effective instrument for encouraging fuel treatment.

The study’s main objective is to identify optimal management strategies for planted forests when carbon benefits are considered. The Faustmann model is extended to include multi-stands and spatial arrangement of forest stands of Eucalyptus urophylla and Acacia mangium in Yen Bai province in northern Vietnam. Farmers’ current practice is to cut trees at age five, whereas the optimal rotation age of E. urophylla (when only timber has a market value) is 10 and 9 years for households and forest enterprises, respectively, at a 5 % discount rate. For A. mangium, the optimal rotation age is 13 years for both households and forest enterprises. The NPV is VND 16 million per hectare for households of both E. urophylla and A. mangium. For forest enterprises, the NPV is VND 57 million and VND 62 million per hectare for E. urophylla and A. mangium, respectively. Adding carbon values makes the optimal rotation age slightly shorter and the NPV higher. Similarly, taking into account the spatial arrangement of forest stands shortens the rotation age and improves the NPV. To encourage forest owners to lengthen the rotation age, the government can use a lump sum payment of carbon benefits at the beginning of the rotation. A planting cost subsidy will also help to narrow the actual and the optimal rotation age.

Near-natural silvicultural regimes for beech (Fagus sylvatica L.), in the form of uneven-aged selective felling, receive increasing interest in Denmark. This is partly due to the ability of this system to preserve the forest climate and maintain important ecological functions such as bio-geochemical cycling and biodiversity conservation. The optimal age to convert from even-aged management to uneven-aged selective felling seems to be as early as possible, about 55 years, when sufficient natural seeding can be expected. A fixed conversion period of 100 years is assumed. This regime, here analysed by the use of a so-called chessboard model, appears to be economically superior to clear felling if the regime is initiated in medium-aged stands down to the age of 55 years, assuming a high site quality and a real discount rate of 3% per annum. Uneven-aged selective felling seems to be economically superior to even-aged natural regeneration, assuming that: (i) the stumpage prices of regeneration harvests are increased by 10%, or (ii) the diameters of regeneration harvests exceed those of even-aged management by about 17% simultaneous with an identical increase of the maximum stumpage price. Clear felling seems to be the more profitable regime only if: (i) the stand is close to the economic optimal rotation age for clear felling, and (ii) when the stumpage prices of regeneration harvests achieved by use of the uneven-aged selective management regime are reduced by 10% or more due to quality defects caused by prolonged rotation ages. The above results are sensitive to variation of stumpage prices, but less so to variation of regeneration costs associated with near-natural management systems. However, the near-natural silvicultural regimes may be unable to fulfill the liquidity objectives following from the application of traditional management systems.

Due to rapid change in timber prices in the Japanese market most likely affected by imported timber from countries such as the U.S., Canada, and the Nordic countries, the domestic forest managers have been facing a large degree of future price uncertainty. Because of this, it becomes necessary to take the future price uncertainty into account within the forest management framework. In this paper, the continuous time stochastic process, i.e., the geometric Brownian motion, has been used to model the log price process. The binomial option pricing approximation was then applied to value the Sugi (Cryptomeria japonica) and Hinoki (Chamaecyparis obtusa) forested land under stochastic log prices in order to search for an optimal rotation age. Our experiments with the proposed two state stochastic dynamic programming model showed that when the current log price is high enough to cover all costs, an optimal rotation age from the stochastic price and deterministic price models coincides, although the total expected present net value from management activities differs. Also it was shown that as the current log price decreases, an optimal rotation age derived from the stochastic price model becomes longer than that from the deterministic price model. If the current log price further decreases, then forest management will be abandoned, and the forest stand will be converted into alternative uses.

Summary Ashgate Publishing Limited, Gower House, Croft Road, Aldershot, Hants GU11 3HR, England ( www.ashgate.com ). 498 p. £ 100.00. ISBN 0-7546-2237-1 (hardback). Being one volume in the series of the International Library of Environmental Economics and Policy (T. Tietenberg and W. Morrison, gen. eds.), this book is a collection of some of the most significant journal essays in forest economics and forest policy. In compiling this volume, Roger Sedjo did a great service to the forest economics profession. This volume includes twenty-five essays originally published between 1849 and 1996 in a dozen journals, and one chapter from the Third Assessment Report of the International Panel on Climate Change (IPCC, 2001) which addresses the biological sequestration of carbon in terrestrial ecosystems. These are organized into four parts: the harvest rotation issue, timber supply, multiple-use and non-timber outputs, and global issues. An introduction essay to this volume, written by the editor, provides an overview of the major issues in forest resource management and discusses some the most important contributions to the forest economics literature. The eleven essays in the first part of the book provide a rather complete coverage of the most important contributions to the literature on optimal rotation age, which is a fundamental issue in forest management and forestry investment. Four of the essays (Faustmann 1849, Ohlin 1921, Bentley and Teeguarden 1965, and Samuelson 1976) address the basic formulation and interpretation of the optimal rotation model. Four essays (Lofgren 1985, Newman, Gilbert and Hyde 1985, Reed 1984, and Brazee and Mendelsohn 1988) extend the basic rotation model to examine the rotation age decision in the presence of deterministic trends and uncertainty in timber yield and price, respectively. Based on the Faustamnn rotation model, Klemperer (1976) and Chang (1982) examine the impacts of taxation on forest value and on the optimal rotation age. Koskela (1989) provides a detailed analysis of the impacts of taxation on timber harvest decisions under price uncertainty. What I feel missing in this part is a comparative statics analysis examining the impacts of changing economic parameters on the optimal rotation age. Part II includes five essays on economic analysis of long-run timber supply. Clawson (1979) reviews the historical development of forest resource and forest utilization in the United States. Vaux (1973) examines the long-run potential supply of timber from forest plantations in California. Berck (1979) investigates the difference in harvesting behavior between private forest owners and public managers. Lyon (1981) and Lyon and Sedjo (1983) examine the optimal exploitation of old-growth natural forests and the transition to steady state. While these essays all focus on the long-run timber supply in the United States, the methods developed and used in these papers could be applied for any other region. The exploitation of old-growth natural forests and the long-term availability of timber have been without doubt two major concerns in the United States. In many parts of the world, however, concerns about timber supply in the short-run have also had great influences on the development of forest policy. It would have been appreciated if a couple of essays addressing the short-run supply of timber had been included. Part III contains three essays dealing with the problem of multiple-use forest management. Gregory (1955) develops an economic framework for multiple-use management based joint production theory. Hartman (1976) examines the multiple-use rotation age decision. Swallow, Parks and Wear (1990) investigate the problem of non-convexities involved in multiple-use rotation age decisions. The merits of these essays lie in that they use rather simple models to demonstrate the importance of incorporating non-timber benefits in forestry decisions and the complexities of the multiple-use problem. In his 1976 essay, Hartman points out that in many situations management practices applied to one stand affect the value of non-timber outputs derived from the adjacent stands; such interdependence needs to be incorporated into multiple-use decision analysis. I certainly would like to find in this volume one or two essays examining the impacts of stand interdependence on the optimal decision. Another important issue in multiple-use management, which is not covered in this volume either, is the valuation of non-market priced outputs and services. Yet I believe that this omission is well motivated, for there are two separate volumes in this series devoted to non-market valuation methods (R. T. Carson, ed. Direct Environmental Valuation Methods , Volumes I and II). The seven essays in Part IV deal with a set of forest economic and policy issues related to global warming and biodiversity conservation. Parks and Hardie (1995) examine the cost-effective subsidies to convert marginal agricultural land to forests for the purpose of carbon sequestration. Hoen and Solberg (1993) analyze the potential and cost-effectiveness of increasing carbon sequestration in existing forests by changing forestry practices. van Kooten, Binkley and Delcourt (1995) examine the effect of carbon taxes and subsidies on the optimal rotation age. The chapter from the Third Assessment Report of IPCC (2001) provides a comprehensive review of the literature on the ecological, environmental, social and economic aspects of carbon sequestration in terrestrial ecosystems. While forests and forest management could play an important role in mitigating climate change, increasing level of atmospheric dioxide and climate change would inevitably affect the productivity of forest ecosystems, thereby could have significant impacts on future timber growth, harvest and inventory as well as carbon storage in forest ecosystems. Joyce et al. (1995) present a framework for analyzing the potential effects of climate change on the forest sector. The remaining two essays in this part examine the costs and benefits of biodiversity preservation, respectively. Montgomery, Brown and Adams (1994) estimate the marginal cost of preserving the northern spotted owl. Simpson, Sedjo and Reid (1996) examine the expected value of the marginal species as an input to pharmaceuticals. The editor points out in the introduction chapter that there are many other important contributions that are not included in this volume, some of these are mentioned, others not. In addition to the few omissions noted earlier, several important economic and policy issues such as uneven-aged stand management, deforestation, international trade, sustainable forestry, forest recreation, wildlife management and so on are not discussed. Moreover, none of the journal essays published since 1997 is selected. That there are many other important contributions does not mean the essays included in this volume are less important, however. While each forest economist may present a different list of the most important papers, most (if not all) of the essays in this volume would appear on anyone's list. I strongly recommend this book for research scientists and graduate students of forest economics as an essential addition to their reference library.

This study proposes a model based on discrete optimal control for estimating the optimal rotation age of Pinus nigra in the Spanish Iberian System. The model was constructed using the NPV (alternately LEV) of forest management as objective function and a model of stand evolution represented by a finite difference equation. The optimal rotation ages obtained corresponding to the 2-4% discount rate interval were between 60 and 100 years for the NPV strategy (50 and 70 years for the LEV strategy). With regard to the optimal management schedule, the results have shown the need to intensify the harvesting at 40-60 years in order to maximize the production of posts in view of the high price they command on the market., En este trabajo se propone un modelo basado en control óptimo discreto para estimar el turno del Pinus nigra en el Sistema Ibérico. El modelo se construye utilizando como función objetivo el VAN (alternativamente LEV) de la gestión forestal y un modelo de evolución de las masas representado por una ecuación en diferencias finitas. Los turnos obtenidos correspondientes a tipos de descuento en el rango 2-4% están entre 60 y 100 años para el caso del VAN (50 y 70 años para el caso del LEV). En relación a la estrategia de gestión, los resultados obtenidos mostraron la necesidad de intensificar los aprovechamientos en el intervalo comprendido entre los 40 y 60 años, en orden a maximizar la producción de postes, debido al alto valor que éstos alcanzan en el mercado.

This study proposes a model based on discrete optimal control for estimating the optimal rotation age of Pinus nigra in the Spanish Iberian System. The model was constructed using the NPV (alternately LEV) of forest management as objective function and a model of stand evolution represented by a finite difference equation. The optimal rotation ages obtained corresponding to the 2-4% discount rate interval were between 60 and 100 years for the NPV strategy (50 and 70 years for the LEV strategy). With regard to the optimal management schedule, the results have shown the need to intensify the harvesting at 40-60 years in order to maximize the production of posts in view of the high price they command on the market., En este trabajo se propone un modelo basado en control óptimo discreto para estimar el turno del Pinus nigra en el Sistema Ibérico. El modelo se construye utilizando como función objetivo el VAN (alternativamente LEV) de la gestión forestal y un modelo de evolución de las masas representado por una ecuación en diferencias finitas. Los turnos obtenidos correspondientes a tipos de descuento en el rango 2-4% están entre 60 y 100 años para el caso del VAN (50 y 70 años para el caso del LEV). En relación a la estrategia de gestión, los resultados obtenidos mostraron la necesidad de intensificar los aprovechamientos en el intervalo comprendido entre los 40 y 60 años, en orden a maximizar la producción de postes, debido al alto valor que éstos alcanzan en el mercado.

This paper analyzes the optimal harvest age of a forest if the forest provides a flow of valuable services while standing in addition to the value of the timber when it is harvested. A basic conclusion is that the presence of recreational or other services provided by a standing forest may well have an important impact on when or whether to harvest.