IDEAS home Printed from https://ideas.repec.org/a/ris/actuec/v77y2001i1p27-51.html
   My bibliography  Save this article

La gestion optimale d’une forêt exploitée pour son potentiel de diminution des gaz à effet de serre et son bois

Author

Listed:
  • Ariste, Ruolz

    (Direction de la recherche appliquée et de l’analyse, Santé Canada)

  • Lasserre, Pierre

    (Département des sciences économiques, UQAM)

Abstract

This papers aims to determine the optimal rotation and the best alternative use of a forest stand when wood price is assumed to follow a Geometrical Brownian Motion and the externality generated by the forest capacity to reduce the level of carbon dioxide in the air is adequately taken into account. It is shown that the decision-making of cutting the trees depends heavily of the use which will be made of the harvested wood. The results of the model indicate what follows: Cet article cherche à déterminer les âges optimaux de coupe d’un peuplement forestier lorsque le prix du bois suit, par hypothèse, un processus de mouvement brownien géométrique et l’externalité qu’engendre une forêt, par sa capacité à réduire le niveau du dioxyde de carbone de l’air et donc l’effet de serre, est adéquatement prise en compte. L’utilisation qui sera faite du bois récolté se révèle déterminante dans la prise de décision de coupe des arbres. Les résultats du modèle indiquent ce qui suit :

Suggested Citation

  • Ariste, Ruolz & Lasserre, Pierre, 2001. "La gestion optimale d’une forêt exploitée pour son potentiel de diminution des gaz à effet de serre et son bois," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(1), pages 27-51, mars.
  • Handle: RePEc:ris:actuec:v:77:y:2001:i:1:p:27-51
    as

    Download full text from publisher

    File URL: http://id.erudit.org/iderudit/602343ar
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39, October.
    2. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-771, September.
    3. Morck, Randall & Schwartz, Eduardo & Stangeland, David, 1989. "The Valuation of Forestry Resources under Stochastic Prices and Inventories," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 24(4), pages 473-487, December.
    4. Conrad, Jon M., 1997. "On the option value of old-growth forest," Ecological Economics, Elsevier, vol. 22(2), pages 97-102, August.
    5. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    6. Nelson, Daniel B & Ramaswamy, Krishna, 1990. "Simple Binomial Processes as Diffusion Approximations in Financial Models," Review of Financial Studies, Society for Financial Studies, vol. 3(3), pages 393-430.
    7. Snyder, Donald L. & Bhattacharyya, Rabindra N., 1990. "A more general dynamic economic model of the optimal rotation of multiple-use forests," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 168-175, March.
    8. G. Cornelis van Kooten & Clark S. Binkley & Gregg Delcourt, 1995. "Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 365-374.
    9. Amin, Kaushik I., 1991. "On the Computation of Continuous Time Option Prices Using Discrete Approximations," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 26(4), pages 477-495, December.
    10. Thomas A. Thomson, 1992. "Optimal Forest Rotation When Stumpage Prices Follow a Diffusion Process," Land Economics, University of Wisconsin Press, vol. 68(3), pages 329-342.
    11. Nordhaus, William D, 1991. "A Sketch of the Economics of the Greenhouse Effect," American Economic Review, American Economic Association, vol. 81(2), pages 146-150, May.
    12. Yin, Runsheng & Newman, David H., 1996. "The Effect of Catastrophic Risk on Forest Investment Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 186-197, September.
    13. Cox, John C. & Ross, Stephen A. & Rubinstein, Mark, 1979. "Option pricing: A simplified approach," Journal of Financial Economics, Elsevier, vol. 7(3), pages 229-263, September.
    14. G. Cornelis van Kooten & Louise M. Arthur & W. R. Wilson, 1992. "Potential to Sequester Carbon in Canadian Forests: Some Economic Considerations," Canadian Public Policy, University of Toronto Press, vol. 18(2), pages 127-138, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cairns, Robert D. & Lasserre, Pierre, 2004. "Reinforcing economic incentives for carbon credits for forests," Forest Policy and Economics, Elsevier, vol. 6(3-4), pages 321-328, June.
    2. Cairns, Robert D. & Lasserre, Pierre, 2006. "Implementing carbon credits for forests based on green accounting," Ecological Economics, Elsevier, vol. 56(4), pages 610-621, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Newman, D.H., 2002. "Forestry's golden rule and the development of the optimal forest rotation literature," Journal of Forest Economics, Elsevier, vol. 8(1), pages 5-27.
    2. Hildebrandt, Patrick & Knoke, Thomas, 2011. "Investment decisions under uncertainty--A methodological review on forest science studies," Forest Policy and Economics, Elsevier, vol. 13(1), pages 1-15, January.
    3. Ben Abdallah, Skander & Lasserre, Pierre, 2016. "Asset retirement with infinitely repeated alternative replacements: Harvest age and species choice in forestry," Journal of Economic Dynamics and Control, Elsevier, vol. 70(C), pages 144-164.
    4. Manley, Bruce & Niquidet, Kurt, 2010. "What is the relevance of option pricing for forest valuation in New Zealand?," Forest Policy and Economics, Elsevier, vol. 12(4), pages 299-307, April.
    5. Chang, Sun Joseph & Zhang, Fan, 2023. "Active timber management by outsourcing stumpage price uncertainty with the American put option," Forest Policy and Economics, Elsevier, vol. 154(C).
    6. Lander, Diane M. & Pinches, George E., 1998. "Challenges to the Practical Implementation of Modeling and Valuing Real Options," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(3, Part 2), pages 537-567.
    7. Gong, Peichen & Boman, Mattias & Mattsson, Leif, 2005. "Non-timber benefits, price uncertainty and optimal harvest of an even-aged stand," Forest Policy and Economics, Elsevier, vol. 7(3), pages 283-295, March.
    8. Strange, Niels & Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark, 2019. "Afforestation as a real option with joint production of environmental services," Forest Policy and Economics, Elsevier, vol. 104(C), pages 146-156.
    9. Stern, Nicholas, 2018. "Public economics as if time matters: Climate change and the dynamics of policy," Journal of Public Economics, Elsevier, vol. 162(C), pages 4-17.
    10. Chen, Shan & Insley, Margaret, 2012. "Regime switching in stochastic models of commodity prices: An application to an optimal tree harvesting problem," Journal of Economic Dynamics and Control, Elsevier, vol. 36(2), pages 201-219.
    11. Lim, Terence & Lo, Andrew W. & Merton, Robert C. & Scholes, Myron S., 2006. "The Derivatives Sourcebook," Foundations and Trends(R) in Finance, now publishers, vol. 1(5–6), pages 365-572, April.
    12. Insley, M.C. & Wirjanto, T.S., 2010. "Contrasting two approaches in real options valuation: Contingent claims versus dynamic programming," Journal of Forest Economics, Elsevier, vol. 16(2), pages 157-176, April.
    13. Robert Deacon & Charles Kolstad & Allen Kneese & David Brookshire & David Scrogin & Anthony Fisher & Michael Ward & Kerry Smith & James Wilen, 1998. "Research Trends and Opportunities in Environmental and Natural Resource Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 383-397, April.
    14. Tee, James & Scarpa, Riccardo & Marsh, Dan & Guthrie, Graeme, 2012. "Valuation of Carbon Forestry and the New Zealand Emissions Trading Scheme: A Real Options Approach Using the Binomial Tree Method," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123665, International Association of Agricultural Economists.
    15. Suresh M. Sundaresan, 2000. "Continuous‐Time Methods in Finance: A Review and an Assessment," Journal of Finance, American Finance Association, vol. 55(4), pages 1569-1622, August.
    16. Makropoulou, Vasiliki & Dotsis, George & Markellos, Raphael N., 2013. "Environmental policy implications of extreme variations in pollutant stock levels and socioeconomic costs," The Quarterly Review of Economics and Finance, Elsevier, vol. 53(4), pages 417-428.
    17. Duku-Kaakyire, Armstrong & Nanang, David M., 2004. "Application of real options theory to forestry investment analysis," Forest Policy and Economics, Elsevier, vol. 6(6), pages 539-552, October.
    18. Insley, Margaret, 2002. "A Real Options Approach to the Valuation of a Forestry Investment," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 471-492, November.
    19. Carlos de Lamare Bastian-Pinto & Alexandre Paula Silva Ramos & Luiz de Magalhães Ozorio & Luiz Eduardo Teixeira Brandão, 2015. "Uncertainty and Flexibility in the Brazilian Beef Livestock Sector: the Value of the Confinement Option," Brazilian Business Review, Fucape Business School, vol. 12(6), pages 100-120, November.
    20. Alvarez, Luis H.R. & Koskela, Erkki, 2007. "Optimal harvesting under resource stock and price uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 31(7), pages 2461-2485, July.

    More about this item

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q39 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:actuec:v:77:y:2001:i:1:p:27-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Benoit Dostie (email available below). General contact details of provider: https://edirc.repec.org/data/scseeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.