The effects of the risk of fire on the optimal rotation of a forest

Reed, William J.

doi:10.1016/0095-0696(84)90016-0

Cited by 295 publications

(238 citation statements)

References 3 publications

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“…This is in line with previous studies that show that increasing the risk of a catastrophic loss decreases the optimal rotation length (Amacher et al 2009). For example Reed (1984) adapted the infinite rotation Faustmann formula to include the arrival of fire using a homogeneous Poisson distribution, and found that the risk of an abiotic event increased the effective discount rate so that the forest owner perceives a higher opportunity cost of not harvesting, and thus shortens the optimal rotation length. Similarly, when the Poisson distribution is inhomogeneous, the risk of an abiotic event increases with stand age, and the optimal rotation length is shortened further (Amacher et al 2009).…”

Section: Discussionmentioning

confidence: 99%

“…Some notable contributions include the addition of the non-market value of forests (Hartman 1976;Samuelson 1976); the effect of catastrophic loss, for example from fire (Reed 1984;Englin et al 2000) or wind blow (Price 2011); the effect of including a carbon market (Chladná 2007;Price and Willis 2011); uncertainty and risk associated with future prices (Alvarez and Koskela 2006;Loisel 2011;Sims and Finnoff 2013); and multiple forests and their interdependent provision of amenity services (Koskela and Ollikainen 2001). The arrival of tree disease could be considered as a type of catastrophic event in the case of widespread epidemics where large areas of forest are felled and market and non-market values (such as ecosystem services) are affected.…”

Section: Introductionmentioning

confidence: 99%

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The Effects of Disease on Optimal Forest Rotation: A Generalisable Analytical Framework

Macpherson

Kleczkowski

Healey

et al. 2016

Environ Resource Econ

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The arrival of novel pathogens and pests can have a devastating effect on the market values of forests. Calibrating management strategies/decisions to consider the effect of disease may help to reduce disease impacts on forests. Here, we use a novel generalisable, bioeconomic model framework, which combines an epidemiological compartmental model with a Faustmann optimal rotation length model, to explore the management decision of when to harvest a single rotation, even-aged, plantation forest under varying disease conditions. Sensitivity analysis of the rate of spread of infection and the effect of disease on the timber value reveals a key trade-off between waiting for the timber to grow and the infection spreading further. We show that the optimal rotation length, which maximises the net present value of the forest, is reduced when timber from infected trees has no value; but when the infection spreads quickly, and the value of timber from infected trees is non-zero, it can be optimal to wait until the disease-free optimal rotation length to harvest. Our original approach provides an exemplar framework showing how a bioeconomic model can be used to examine the effect of tree diseases on management strategies/decisions.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Effects of Disease on Optimal Forest Rotation: A Generalisable Analytical Framework

Macpherson

Kleczkowski

Healey

et al. 2016

Environ Resource Econ

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“…Following the existing literature on forest management under fire risk (see Reed [25] among others), we assume that the risk of fire can be described by a Poisson process. This assumption implies that the risk of fire is the same every year.…”

Section: Fire Riskmentioning

confidence: 99%

Forest management under fire risk when forest carbon sequestration has value

Couture¹,

Reynaud

2011

Ecological Economics

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In this paper, 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. The preferences of the representative non-industrial private forest (NIPF) owner are modeled though an expected utility specification. We introduce saving as a decision of the forest owner at any time. The problems of forest management and saving decisions are solved simultaneously using a stochastic dynamic programming method. A numerical programming method is used to characterize the optimal forest and saving policies. We apply this framework to model the behavior of a representative NIPF owner located in the Southwest of France. The empirical application indicates that a higher risk of fire will decrease the optimal rotation period, while higher carbon prices will increase the optimal harvesting age. We show that increasing the risk of fire leads to a reduction in rotation duration. On the contrary, a higher carbon price makes carbon sequestration more profitable, thereby leading to increasing the rotation duration. We then show how the carbon price/risk of fire frontier is affected by risk aversion.

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“…Let X represent the average rate of pestinduced forest mortality. Reed (1984) shows that the effect of catastrophic mortality on the optimal rotation is to add the risk factor X to the discount rate in the Faustmann formula:…”

Section: Mitigating Biologic Risk In a Forest Plantationmentioning

confidence: 99%

“…Economic models developed to evaluate the influence of catastrophic mortality on optimal management behavior have recommended reducing the exposure of forest assets to potential disturbances by shortening the rotation period (Mar-tell 1980, Routledge 1980, Reed 1984, Reed and Errico 1985. By treating the parameters characterizing stochastic processes as certain, analytical and empirical results have been derived that indicate the benefits of reductions in the rate of catastrophic disturbances.…”

Section: Introductionmentioning

confidence: 99%

Proceedings of the Seventh Biennial Southern Silvicultural Research Conference

Brissette¹

1993

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The effects of the risk of fire on the optimal rotation of a forest

Cited by 295 publications

References 3 publications

The Effects of Disease on Optimal Forest Rotation: A Generalisable Analytical Framework

The Effects of Disease on Optimal Forest Rotation: A Generalisable Analytical Framework

Forest management under fire risk when forest carbon sequestration has value

Proceedings of the Seventh Biennial Southern Silvicultural Research Conference

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