Canadian Forest Service Publications

Should climate change make us think more about the economics of forest management? 2015. Yang, J.; McKenney, D.W.; Weersink, A. The Forestry Chronicle 91:23-31.

Year: 2015

Issued by: Great Lakes Forestry Centre

Catalog ID: 35876

Language: English

Availability: PDF (request by e-mail)

Mark record

Abstract

Forest management agencies have budget constraints and continually face difficult questions regarding how much to invest in silviculture and when to harvest forests. Economic thought suggests these decisions should be guided by the pursuit of economic efficiency and tools like net present value (NPV) analysis. In forestry this would make use of the so-called Faustmann model and generally result in shorter rotation ages than the Maximum Sustained Yield (MSY) criterion, which is often used as a policy objective in forest management. The two approaches have caused tension and controversy between foresters and economists. Climate change is adding yet another uncertainty dimension to the forest management challenge. Global climate models suggest massive changes in climate this coming century that will surely affect forests. Here we use climate change as a backdrop to compare the MSY and Faustmann results for black spruce (Picea mariana) and white pine (Pinus strobus) in Ontario. Climate change is adding new risks to silvicultural investments. Our intent is not to “resolve” the management problem but highlight some issues and differences between the two approaches. We suggest that climate change could, or should, cause a resurgence of the debate over pursuit of intertemporal efficiency in forest management.

Plain Language Summary

This is an opinion piece about the use of economics in forest management decision making. Forest management agencies have budget constraints and continually face difficult questions regarding how much to invest in silviculture and when to harvest forests. Economic thought suggests these decisions should be guided by the pursuit of economic efficiency and tools like net present value (NPV) analysis. In forestry this would make use of the so-called Faustmann model and generally results in shorter rotation ages than the Maximum Sustained Yield (MSY) criterion, which is often used as a policy objective in forest management. The two approaches have caused tension and controversy between foresters and economists. Climate change is adding yet another uncertainty dimension to the forest management challenge. Global climate models suggest massive changes in climate this coming century that will surely affect forests. Here we use climate change as a backdrop to compare the MSY and Faustmann results for black spruce (Picea mariana) and white pine (Pinus strobus) in Ontario. Climate change is adding new risks to silvicultural investments. Our intent is not to “resolve” the management problem but highlight some issues and differences between the two approaches.