Optimal Forest Rotations with Environmental Values and Endogenous Fire Risk

Adam Daigneault (), Brent Sohngen and Mario Miranda ()

No 9738, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper develops a model that solves for the optimal economic harvest rotation problem to maximize revenue of an even-aged forest plantation when there is a risk of a catastrophic forest fire. The paper also investigates the feasibility of using fire prone stands for carbon sequestration and estimates the effects that it would have on the optimal management regime and rotation age empirically using a typical Douglas-fir stand in the Pacific Northwest. The model incorporates risk-reducing management practices that allow risk and growth to be endogenous, and the optimal rotation model is solved using numerical simulation techniques. Results show that higher carbon prices increase the rotation length regardless of the probability of fire and that the frequency of risk-reducing management practices increase as the stand approaches the optimal harvest age. Results also indicate that intermediate fuel treatments can provide economical and environmental benefits, even with a high probability of fire.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 41
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9738

DOI: 10.22004/ag.econ.9738

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