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Forest Management Under Fire Risk When Forest Carbon Sequestration Has Value

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  • Stéphane Couture
  • Arnaud Reynaud

Abstract

We develop a multiple forest use model to determine the optimal harvest date for a forest stand producing both timber and carbon benefits under a risk of fire. An empirical application is provided for a forest owner producing maritime pine in Southwest of France. Our results indicate that a higher risk of fire will decrease the optimal rotation period. On the contrary, higher carbon prices increase the optimal harvesting age. To investigate the contradictory effects of fire risk and carbon price on forest rotation, we identify the set of carbon prices and fire risks that lead to a given rotation age. We also show that forest owner's willingness to pay for a risk reduction can be substantial (37.33Â euros by ha and by year to reduce the annual fire risk from 1.26% to 0.07%).
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  • Stéphane Couture & Arnaud Reynaud, 2009. "Forest Management Under Fire Risk When Forest Carbon Sequestration Has Value," LERNA Working Papers 09.09.285, LERNA, University of Toulouse.
    • Handle: RePEc:ler:wpaper:09.09.285
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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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