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Adapting to frequent fires: Optimal forest management revisited

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  • Patto, João V.
  • Rosa, Renato

Abstract

As the frequency and severity of wildfires escalates in many regions, the study of fire-resilient forestry practices becomes crucial. While forest owners may employ several silvicultural practices to mitigate fire damage, the analytical study of optimal forest management has been reduced to the effects of fire on optimal rotation only. The fundamental result of this literature date back to the early 1980s and has remained virtually uncontested since then. This paper develops an infinite rotation cycle forest model in which landowners optimally choose rotation age, volume, and timing of partial harvesting in the presence of fire risk. We show that this setting fundamentally changes earlier results. In particular, more frequent fires imply beginning commercial thinning sooner but not necessarily shortening the rotation age. Two numerical applications highlight the empirical relevance of our findings.

Suggested Citation

  • Patto, João V. & Rosa, Renato, 2022. "Adapting to frequent fires: Optimal forest management revisited," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:jeeman:v:111:y:2022:i:c:s0095069621001194
    DOI: 10.1016/j.jeem.2021.102570
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    Cited by:

    1. Neha Deopa & Daniele Rinaldo, 2024. "Quickest Detection of Ecological Regimes for Natural Resource Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(5), pages 1327-1366, May.
    2. Kelsall, Claudia & Quaas, Martin F. & Quérou, Nicolas, 2023. "Risk aversion in renewable resource harvesting," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    3. Yu, Zhihan & Ning, Zhuo & Chang, Wei-Yew & Chang, Sun Joseph & Yang, Hongqiang, 2023. "Optimal harvest decisions for the management of carbon sequestration forests under price uncertainty and risk preferences," Forest Policy and Economics, Elsevier, vol. 151(C).
    4. Laukkanen, Matti & Tahvonen, Olli, 2023. "Wood product differentiation in age-structured forestry," Resource and Energy Economics, Elsevier, vol. 73(C).
    5. Labbé, Rodrigo & Niklitschek, Mario & Contreras, Marco, 2023. "Effect of climate change on the land rent of radiata pine plantations in Chile: Site productivity and forest fires," Forest Policy and Economics, Elsevier, vol. 156(C).

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    More about this item

    Keywords

    Fire risk; Optimal rotation; Optimal thinning; Faustmann model; Climate change;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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