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What Makes Mountain Pine Beetle a Tricky Pest? Difficult Decisions when Facing Beetle Attack in a Mixed Species Forest

Tim Bogle and Gerrit van Kooten

No 117439, Working Papers from University of Victoria, Resource Economics and Policy

Abstract: The pine forest of British Columbia is undergoing its largest recorded pest epidemic. The damage caused by native mountain pine beetle creates difficulties for the public owner of the resource, which is interested in protecting future timber supply while salvaging dead and dying pine. This paper addresses two problems that have often been over-looked: the variability and timing of beetle attack, and the variability of pine inventory in each stand. Management controls are limited to the annual rate of harvest and timber product outputs are based on shelf life – the length of time infested timber can still be used to produce lumber. Using mathematical programming to schedule harvest, we introduce a novel objective function based on the maximization of the net returns of the timber portfolio at the end of the 20 year time horizon under harvest and product flow constraints implemented by the public landowner to insure stability in the forest sector, and especially a stable supply of feedstock (bushchips) for bio-energy production, while recovering value from stands that would otherwise become uneconomical to harvest. The optimal short-run response is to increase harvests over the baseline harvest without beetle. The use of future net returns as the optimization objective ensures that harvest during the 20 year 2 time horizon occurs in stands that would otherwise be economically unharvestable and also the harvest is generally above 70% pine in aggregate. Net returns do not exceed those of the baseline harvest without beetle, regardless of the scenario, as the harvest of low value bushchips must be subsidized by the harvest of timber that can be converted into lumber. Shelflife provides significant changes in NPV as more timber can be converted to lumber if shelflife is longer. The government has a difficult fiscal management problem. Employing an evenflow of total harvest can yield higher net gains but at the risk of relying more heavily on the harvest of damaged timber and reduced future harvests of quality timber for dimensional lumber. This strategy would produce a “feast” of short term revenue followed by a “famine” when bushchip harvest is subsidized by the harvest of better quality timber. Alternatively, managing the individual forest products could yield some minimum government revenues but this strategy could also lead to the need to deplete reserves that could be reserved for future timber supply. Regardless of the strategy, to optimize for future timber supply potential means that a large percentage (25% in this study) of the damaged pine should only be harvested in the future and will not be of a quality to produce lumber.

Keywords: Environmental Economics and Policy; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 23
Date: 2011-11
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uvicwp:117439

DOI: 10.22004/ag.econ.117439

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