On the economics of continuous cover and rotation forestry

Abstract

This dissertation studies the stand-level economics of continuous cover and rotation forestry. The main method of this dissertation is economic-ecological optimization, where statisticalempirical size-structured ecological models are coupled with economic optimization models including fully flexible optimization between continuous cover and rotation forestry. The dissertation consists of a summary section and three original research articles. The first article compares the favourability of continuous cover forestry between pure Norway spruce (Picea abies (L.) Karst.) and Scots pine (Pinus sylvestris L.) stands and studies the effects of ecological models on economically optimal solutions. The second article studies the economics of mixed-species stands with up to four tree species. The third article studies the economics of arctic forestry in the homeland region of the Sámi people using a model that simultaneously includes timber production, carbon storage, and negative externalities of forestry on reindeer husbandry.According to the results, the differences in continuous cover forestry favourability between tree species are largely dependent on both species-specific differences in natural regeneration and natural regeneration differences between ecological models. Under realistic economic parameters, our model specification yields the result that continuous cover forestry is optimal for Norway spruce in both single-and mixed-species stands. In contrast, Scots pine favours rotation forestry in both single-and mixed-species stands. Economic preferability of species mixture cannot be deducted from physical overyielding. In addition, we demonstrate that economically optimal continuous cover forestry avoids "high grading", i.e. selective harvesting that leads to a completely different and economically inferior outcome. Including the negative externalities of forestry on reindeer husbandry into the economic model favours continuous cover forestry in arctic Scots pine stands. A carbon price between €14-€20 tCO2 -1 is enough to imply that saving old-growth forests as carbon storages and reindeer pastures becomes optimal.