Farmland afforestation: Forest optimal rotation ages across discrete optimisation objectives

O’Donoghue, Cathal, O’Fatharta, Eoin, Cathal Geoghegan and Mary Ryan

Land Use Policy, 2024, vol. 139, issue C

Abstract: Forestry is increasingly seen as having a multiplicity of functions, some of which may lead to tensions between the preferences of different forestry stakeholders. One expression of these differing preferences is in the area of optimal rotation length. This paper models the optimal rotation lengths of different aspects of the forestry system – the forest owner, the timber processor, the carbon sequestered, and the social value. A microsimulation framework is utilised to simulate optimal rotation lengths that maximise different aspects of the forestry system including timber volume, processor value of harvested timber, forest owner incomes, carbon emissions and incomes adjusted for a carbon value. The main conclusion is that the optimal rotation lengths vary quite significantly depending upon the stakeholder. We assess the impact of a forest owner harvesting their timber at a time that was financially optimal for them. The processor would have the smallest difference in their annual equivalised net present value (AENPV) from the forest owner. The biggest difference is with the optimal rotation length for carbon, with the AENPV of sequestered carbon being about 50% higher than for the forest owner’s optimal rotation length. The differential for timber lies between the processor and the carbon. As a combination of private and carbon goals, the social return also lies between the processor and carbon amounts, the differential increasing with higher carbon values, reflecting an increasing importance of carbon. Additional survey results find that the financial optimum for a forest owner at a 5% discount rate differs substantially from the actual rotation length. These differing preferences for rotation length reflect the need for a systems-based approach to forestry policy, considering the needs of the system’s various stakeholders.

Keywords: Optimal Rotation Length; Forest Economics; Microsimulation; Innovation System (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:139:y:2024:i:c:s0264837724000437

DOI: 10.1016/j.landusepol.2024.107091

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