Climate change is expected to affect the occurrence of forest pests. This study depicts a method to measure the impact of damage inflicted by a forest pest like oak wilt as a result of climate change. We determine the damage function considering the factors related to the pest damage and forecast the future damage rate under future climate change. We estimated the damage rate by using the quasi-maximum likelihood estimation (QMLE) and predicted the future damage rate by using representative concentration pathways (RCP) 8.5 data. We assessed the impact of pests on the management income and the rotation age by using a dynamic optimization model. The results show that the damage rate and the affected area from oak wilt would increase under the climate change. In addition, the economic evaluation indicates that altered climate would reduce the management returns and increase uncertainty. However, these outcomes could be alleviated by carrying out the control and prevention measures after the infection occurs.Climate 2019, 7, 141 2 of 17 pest occurrences by dealing with both the direct and indirect factors that affect pest populations and pests affecting host trees, respectively. In addition, the model includes other factors, such as forest management and human population to assess the impact of human activities. There are few studies examining the economic impact of forest pests in terms of climate change in Korea. While some studies such as An et al. [11] conducted an economic assessment by assuming the damage rate, we use the directly derived damage rate to assess the economic impact. Previous research such as Haight et al. [12] assessed the economic damage from Ceratocystics fagacearum, a fungus that causes significant disease of oaks in the central United States using a landscape level model. In their study, the metric of damage is a removal cost. They predict that the discounted damage would be $18-60 million in Anoka County, Minnesota, over the next decade. However, the removal cost is on the lower bounds in total economic loss from the oak wilt because they do not consider the economic losses from reduced services [12]. Our study assesses the economic impact of pests on the management income and rotation age by using a dynamic optimization model. We consider not only the direct impact due to forest pests, such as revenue decrease, but also the revenue change according to managerial factors, such as control and prevention of pests. Lastly, we employ the concept of green payments to cover the indirect value of the environment to deduce a new strategic direction for pest control in forests.In this paper, we assess the impact of forest pests on the management income and rotation age by using a dynamic optimization model under climate change. In particular, we determine the damage function considering the direct and indirect factors related to the pest damage and forecast the future damage rate under the future climate conditions. Moreover, we evaluate the economic impact of Korean oak wilt: how it changes future r...