Forest Taxation and Rotation Age under Private Amenity Valuation: New Results

Koskela, Erkki; Ollikainen, Markku

doi:10.1006/jeem.2000.1165

Cited by 45 publications

(23 citation statements)

References 7 publications

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“…It may be the case, however, that private landowners are interested not only in the present value of net harvesting revenue, but also in the amenity services provided by forest stands. Analyzing how the amenity valuation affects the privately optimal rotation has been investigated by Hartman [12], Strang [14], and later Johansson and Löfgren [15], as well as Bowes and Krutilla [16], Koskela and Ollikainen [17], in a deterministic context, and more recently Englin it et al [18], and Amacher et al [19] in a risky context. Unlike other amenity benefits such as recreational use, when carbon benefits are internalized, a landowner must pay for carbon emissions emitted due to tree mortality.…”

Section: Introductionmentioning

confidence: 99%

Forest management under fire risk when forest carbon sequestration has value

Couture¹,

Reynaud

2011

Ecological Economics

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In this paper, we develop a multiple forest use model to determine the optimal harvest date for a forest stand producing both timber and carbon benefits under a risk of fire. The preferences of the representative non-industrial private forest (NIPF) owner are modeled though an expected utility specification. We introduce saving as a decision of the forest owner at any time. The problems of forest management and saving decisions are solved simultaneously using a stochastic dynamic programming method. A numerical programming method is used to characterize the optimal forest and saving policies. We apply this framework to model the behavior of a representative NIPF owner located in the Southwest of France. The empirical application indicates that a higher risk of fire will decrease the optimal rotation period, while higher carbon prices will increase the optimal harvesting age. We show that increasing the risk of fire leads to a reduction in rotation duration. On the contrary, a higher carbon price makes carbon sequestration more profitable, thereby leading to increasing the rotation duration. We then show how the carbon price/risk of fire frontier is affected by risk aversion.

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Section: Introductionmentioning

confidence: 99%

Forest management under fire risk when forest carbon sequestration has value

Couture¹,

Reynaud

2011

Ecological Economics

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“…Hartman (1976) also generalised his model with a planning horizon running through an indefinite sequence of harvests. This kind of traditional economic approach to forest management at the stand level has continued to provide numerous interesting contributions (e.g., Koskela and Ollikainen 2001;Koskela et al 2004) such as knowledge about interdependencies between different services and how different policies (e.g., taxes) and the risk of catastrophic events may influence service provision and optimal management, e.g., optimal rotation age. This traditional approach has two main limitations: it does not consider interactions between stands and it only uses the expected net present value to determine management.…”

Section: From Stand Level To Multiple-use Forestry Modelsmentioning

confidence: 99%

How does economic research contribute to the management of forest ecosystem services?

Garcia

Abildtrup

Stenger

2018

Annals of Forest Science

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& Key message More and more environmental and resource economists are taking a particular interest in research on forest ecosystem services (FES), especially in a context of climate change. Spatial and temporal issues are crucial to economic analyses and for the design of conservation policies. Interdisciplinary research involving ecological and economic disciplines is a prerequisite for the more effective management of forest ecosystems. & Context Economists define non-market ecosystem services (ES) as public or common goods due to their characteristics of non-rivalry in terms of consumption and/or non-excludability. Just because they do not have a price does not mean that ES have no economic value because their social benefits are undoubtedly considerable. These features, associated with the market demand for timber and a poor climate risk assessment, may lead to the under-provision of non-market forest ES and the over-harvesting of timber. & Aims In this article, we review research questions that are central to the enhancement of FES provision. Beyond the economic modelling of the joint provision of FES, we focus on issues related to the design of public policies to guide forest management. The objective is to provide crucial insights concerning the importance of a spatial and sustainable provision of FES. & Results First, we provide an economic interpretation of the FES concept and a review of economic models of forest management. Second, we explain how spatial and temporal dimensions of FES can have major implications on their supply and demand. Both dimensions explain why FESs have to be taken into account in production decisions and public policies (including the design of payment for environmental services (PESs)). & Conclusion A better understanding of FES provision and public policies to be enhanced is not possible without accounting for spatial and temporal dimensions. This helps to analyse the impact of intervention on FES and the cost-effectiveness of economic instruments, implying a coordinated effort to bring together ecological and economic data and models.

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“…3 We express both the government tax revenue function and the landowner's objective function and report the comparative static effects of the taxes and tax exemptions on rotation age. While the former is known from previous analysis (Koskela and Ollikainen 2001a), results concerning tax exemptions are new.…”

Section: Analytics Of Forest Taxation In the Presence Of Tax Progressionmentioning

confidence: 99%

A behavioral and welfare analysis of progressive forest taxation

Koskela¹,

Ollikainen²

2003

Can. J. For. Res.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACT:We use the Hartman rotation model to study behavioral and social welfare effects of forest tax progression. The following new results are shown for harvest and timber taxes. First, a tax-revenue neutral increase in the timber tax rate, compensated by a higher tax exemption, will shorten the optimal private rotation age. A sufficient condition for this to hold for the yield and unit taxes is that the marginal valuation of amenities is non-decreasing with the age of forest stand. Second, for the socially optimal forest taxation, if society can use the neutral site productivity tax to collect tax revenue, the proportional forest tax is enough to internalize the externality caused by private harvesting. Finally, even though site productivity tax is not available, the tax structure should be designed so that tax exemption is neutral implying that the optimal corrective forest taxes remain unchanged.

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Forest Taxation and Rotation Age under Private Amenity Valuation: New Results

Cited by 45 publications

References 7 publications

Forest management under fire risk when forest carbon sequestration has value

Forest management under fire risk when forest carbon sequestration has value

How does economic research contribute to the management of forest ecosystem services?

A behavioral and welfare analysis of progressive forest taxation

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