Carbon taxes and subsidies will affect the optimal forest rotation and, consequently, the carbon stored in forests. Unlike the Hartman rotation, where externality benefits are a function of the volume of timber growing on a site at any time, carbon benefits are a function of the change in biomass. Theoretical and empirical results (for coastal British Columbia and northern Alberta) indicate that, under some tax regimes, it may be socially optimal never to harvest the trees. In general, inclusion of the external benefits from carbon uptake results in rotation ages only a bit longer than the financial (Faustmann) rotation age.

Historically British Columbia's forests were managed under Les for& de la Colombie-Britannique ont ete historiquement the implicit assumption that virtually the whole fqrested land base amenagees en fonction d'une premisse implicite que I'ensemble would, one day, be available for timber production. The BC du tenitoire forestier serait, Ul jour, disponible & des fins de pro-F~~~~~ service and licencees incorporate non-timber values into duction de bois. Le Service forestier de la C.-B. et les detenteurs timber production plans through a process of resource de licences incorporent des valeurs non-ligneuses dans les plans de production de bois par l'entremise d'un processus d"'am6nagement management" which attempts to consider wildlife, riparian habiintegre des rewmes,, qui tente de Fendre en considhtion la tat, recreation, water flows, grazing and other forest uses in les habitats les activites rkreatives, les regimes hydriques, each decision about each hectare where logging is to Occur.1, broutage et les autres utilisations du milieu forestier dans Under this extensive form of management, Silvicult~ral investchaque decision touchant chaque hectare assujetti & ]'exploitation ments are low. This policy has clearly failed either to satisfy legitforestikrere. ~0~s cette forme d'amhagement extensif, les investisseh a t e demands from the environmental community or to produce ments sylvicoles demeurent faibles. Cette politique a echod the predictably high levels of timber harvest needed to sustain the clairement pour ce qui est de la satisfaction des demandes Iegitimes forest products industry and industry-dependent communities. The des communautes environnementales et de la production d'irnporcore problem is that, despite a vast forest estate in British tants niveaux previsibles de recolte de bois necessaires pour Columbia, land has become scarce. It is therefore logical to submaintenir I'industrie des pOduiits forestiers que les communaukk stitUte capital, labour and knowledge for land in forest produc9~i en dependent. Le coeur du ~robleme reside dans le fait que, malgre un important territoire forestier en Colombie-Britannique, processes' a policy lead to substantial les terres sent devenues rares. En consequence il est logique de subtainable timber harvests as well as a system of parks that covers stituer des capitam, de la main d70euvre et de pour des more than the Province. Implementing such apolicy requires terres lors de processus de production forestikre. Une telle polia change in forest management approach to zone the landscape tique devrait mener & un niveau de rkcolte substantiellement plus and manage each zone intensively for a specific purpose. For the eleve et durable de bois, tout en mettant en place un systeme de bulk of commercial timber production, intensively managed parcs qui couvrirait plus de la moitie de la province. L'implantaplantations appear to represent the best technological option. New tion d'une telle politique necessite un changement de l'approche directions in British Columbia's forest...

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This paper examines the weak-form informational efficiency of markets for pine sawtimber stumpage in the U.S. South. Analyses of annual and quarterly rates of price change generally indicate that stumpage markets are efficient. When viewed over monthly intervals, stumpage markets do not pass the tests for weak-form efficiency. This failure is attributed to friction in the market due to the time and cost involved in consumating timber sales. The results have implications for price-responsive timber harvest scheduling, for the application of asset pricing models to forestry investments, and for policies governing sales of timber from public lands.Are markets for stumpage informationally efficient (Samuelson 1965, Fama 1970? This question attends several of the most important problems in forest economics. Stumpage market efficiency is a maintained, yet untested, hypothesis in most econometric analyses of timber supply (e.g., Berek, Adams and Haynes). Recent applications of the capital asset pricing model to forestry investments (e.g., Thomson; Binkley and Washburn 1988a, b; Redmond and Cubbage) assume that stumpage markets are efficient. Conversely, several recent papers rely on predictable departures from equilibrium price levels-market inefficiency-to argue that timber owners can make economic gains by adopting marketing policies which exploit stochastic variations in stumpage prices (Norstrom, Brazee and Mendelsohn 1988b, Lohmander 1988).This paper examines the informational efficiency of markets for sawtimber stumpage. We determine whether the current price of sawtimber stumpage incorporates all of the information obtainable by studying past departures from equilibrium rates of price change. This is known Courtland L. Washburn and Clark S. Binkley are a Ph.D. candidate and a professor, respectively, School of Forestry and Environmental Studies, Yale University.This research is part of a larger project on the evaluation of investments in southern pine forestry which is sponsored jointly by Yale University, the USDA Forest Service Southeastern Forest Experiment Station, Scott Paper Company, Weyerhaeuser Company, South Carolina National Bank, and First Wachovia Bank and Trust.The authors wish to thank two anonymous Journal reviewers for many useful comments on earlier drafts. None of these organizations or individuals is responsible for the data, analysis, or conclusions presented here. as a test of "weak-form" market efficiency (Fama 1970).In the next section the theory of storage (Working 1948(Working , 1949Brennan;Telser) is used to derive a rational expectations equilibrium (Muth, Kohn, Scheinkman and Schechtman) for stumpage markets. In equilibrium, the current price of stumpage will equal its expected future price, less expected capital costs and storage expenses (e.g., land rental and protection from fire and pests) plus the expected value of its physical growth. If new information alters expectations, then stumpage flows in or out of storage until the equilibrium is restored. As long as the store of stump...