Payment for multiple forest benefits alters the effect of tree disease on optimal forest rotation length

Abstract

Forests deliver multiple benefits both to their owners and to wider society. However, a wave of forest pests and pathogens is threatening this worldwide. In this paper we examine the effect of disease on the optimal rotation length of a single-aged, single rotation forest when a payment for non-timber benefits, which is offered to private forest owners to partly internalise the social values of forest management, is included. Using a generalisable bioeconomic framework we show how this payment counteracts the negative economic effect of disease by increasing the optimal rotation length, and under some restrictive conditions, even makes it optimal to never harvest the forest. The analysis shows a range of complex interactions between factors including the rate of spread of infection and the impact of disease on the value of harvested timber and non-timber benefits. A key result is that the effect of disease on the optimal rotation length is dependent on whether the disease affects the timber benefit only compared to when it affects both timber and non-timber benefits. Our framework can be extended to incorporate multiple ecosystem services delivered by forests and details of how disease can affect their production, thus facilitating a wide range of applications.

Climate Change Impacts on Forest Management: A Case of Korean Oak Wilt

“…The following equation developed by Macpherson shows the objective function to assess the forest value that includes the timber and the non-timber incomes [10]:…”

“…Dynamic optimization can be used to find the optimal rotation age for trees suggested by Faustmann [8] and further suggested by Hartman [9], considering wood as well as non-wood services. Macpherson et al [10] generalized the Hartman model and showed that when the payout to non-timber value is considered, the rotation age could be shortened or extended relying on the distribution of the pathogenic pests. The result was contrary to the notion that the rotation age is generally believed to decrease when forest pests occur.…”

The effects of invasive pests and pathogens on strategies for forest diversification

“…Bioeconomic models have also been used to assess the effect of a pathogen on the optimal rotation length of forests (Macpherson et al, 2016, Macpherson et al, 2017). The authors adapted a classical Faustmann model to include the rate of pathogen spread (through a Susceptible-Infected epidemiological model).…”

“…This optimal control framework showed that the optimal rotation length (the forest age at which net present value of the forest is maximised) of a plantation forest is generally shortened when the damage from disease reduces the timber benefit (Macpherson et al, 2016). When a forest manager considers both the timber and non-timber benefits, and the damage from disease reduces the timber benefit only, the optimal rotation length increases; when the damage reduces both the timber and the non-timber benefits, the optimal rotation length is reduced (Macpherson et al, 2017). …”

“…In this paper, we create a bioeconomic model that finds the optimal planting strategy for two tree species. It is assumed that a forest manager has the option of planting two tree species (species A or species B or both), over a fixed rotation period (note: we consider the effects on optimal rotation for a single species in Macpherson et al, 2016, Macpherson et al, 2017). We assume that in the absence of a pathogen threat, the commercially preferred species is species A.…”