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Optimizing the Harvest Timing in Continuous Cover Forestry

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  • Janne Rämö

    (University of Helsinki)

  • Olli Tahvonen

    (University of Helsinki)

Abstract

We analyze continuous cover or uneven-aged forest management with optimized harvest timing. The analysis is based on an economic description of uneven-aged forestry using a size-structured transition matrix model. In discrete time with fixed harvesting costs, optimizing harvest timing requires solving of a vector of integer variables in addition to the usual number of harvested trees. This mixed integer problem is solved using bilevel optimization, where the times of harvest are solved by a hill-climbing algorithm, and harvest intensities by a gradient-based interior point algorithm. Optimizing the integer harvest timing variables is crucial especially when the initial stand is an outcome of a plantation type of even-aged management and the forest owner prefers to continue forestry without clearcuts. Optimal harvest timing is shown to depend strongly on a fixed cost level, initial stand state, and interest rate. A steady state harvesting interval is typically 10–25 years, however, during transition it may be as long as 55 years. Increasing the interest rate decreases the average steady state capital value of the stand but may cause the steady state harvest frequency to decrease or increase due to flexibility in targeting harvests to different tree size classes. It appears that the legal limitations both in Sweden and Finland are constraining the optimal solutions.

Suggested Citation

  • Janne Rämö & Olli Tahvonen, 2017. "Optimizing the Harvest Timing in Continuous Cover Forestry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 853-868, August.
  • Handle: RePEc:kap:enreec:v:67:y:2017:i:4:d:10.1007_s10640-016-0008-4
    DOI: 10.1007/s10640-016-0008-4
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    References listed on IDEAS

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    1. Samuelson, Paul A, 1976. "Economics of Forestry in an Evolving Society," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 466-492, December.
    2. Hussey, Robert M, 1997. "Solving Dynamic Economic Models with Nonconvexities Due to Fixed Costs," Computational Economics, Springer;Society for Computational Economics, vol. 10(4), pages 377-386, November.
    3. Benoît Colson & Patrice Marcotte & Gilles Savard, 2007. "An overview of bilevel optimization," Annals of Operations Research, Springer, vol. 153(1), pages 235-256, September.
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    Citations

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    Cited by:

    1. Hertog, Iris Maria & Brogaard, Sara & Krause, Torsten, 2022. "Barriers to expanding continuous cover forestry in Sweden for delivering multiple ecosystem services," Ecosystem Services, Elsevier, vol. 53(C).
    2. Juutinen, Artti & Tolvanen, Anne & Koskela, Terhi, 2020. "Forest owners' future intentions for forest management," Forest Policy and Economics, Elsevier, vol. 118(C).
    3. Juutinen, Artti & Kurttila, Mikko & Pohjanmies, Tähti & Tolvanen, Anne & Kuhlmey, Katharina & Skudnik, Mitja & Triplat, Matevž & Westin, Kerstin & Mäkipää, Raisa, 2021. "Forest owners' preferences for contract-based management to enhance environmental values versus timber production," Forest Policy and Economics, Elsevier, vol. 132(C).
    4. Knoke, Thomas & Kindu, Mengistie & Jarisch, Isabelle & Gosling, Elizabeth & Friedrich, Stefan & Bödeker, Kai & Paul, Carola, 2020. "How considering multiple criteria, uncertainty scenarios and biological interactions may influence the optimal silvicultural strategy for a mixed forest," Forest Policy and Economics, Elsevier, vol. 118(C).
    5. Yoshioka, Hidekazu & Yaegashi, Yuta, 2019. "A finite difference scheme for variational inequalities arising in stochastic control problems with several singular control variables," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 156(C), pages 40-66.
    6. Yemshanov, Denys & Haight, Robert G. & MacQuarrie, Chris J.K. & Simpson, Mackenzie & Koch, Frank H. & Ryan, Kathleen & Bullas-Appleton, Erin, 2022. "Hierarchical governance in invasive species survey campaigns," Ecological Economics, Elsevier, vol. 201(C).
    7. Eyvindson, Kyle & Duflot, Rémi & Triviño, María & Blattert, Clemens & Potterf, Mária & Mönkkönen, Mikko, 2021. "High boreal forest multifunctionality requires continuous cover forestry as a dominant management," Land Use Policy, Elsevier, vol. 100(C).
    8. Koster, Roman & Fuchs, Jasper M., 2022. "Opportunity costs of growing space – an essential driver of economical single-tree harvest decisions," Forest Policy and Economics, Elsevier, vol. 135(C).
    9. Parkatti, Vesa-Pekka & Assmuth, Aino & Rämö, Janne & Tahvonen, Olli, 2019. "Economics of boreal conifer species in continuous cover and rotation forestry," Forest Policy and Economics, Elsevier, vol. 100(C), pages 55-67.
    10. Roessiger, Joerg & Kulla, Ladislav & Bošeľa, Michal, 2018. "Finding equilibrium in continuous-cover forest management sensitive to interest rates using an advanced matrix transition model," Journal of Forest Economics, Elsevier, vol. 33(C), pages 83-94.

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