Advanced Search
MyIDEAS: Login to save this paper or follow this series

Forest Management under Fire Risk when Forest Carbon Sequestration Has Value

Contents:

Author Info

  • Couture, Stéphane
  • Reynaud, Arnaud

Abstract

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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.tse-fr.eu/images/doc/wp/env/wp_env_5_2009.pdf
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-005.

as in new window
Length:
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:tse:wpaper:22034

Contact details of provider:
Phone: (+33) 5 61 12 86 23
Web page: http://www.tse-fr.eu/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Gregory S. Amacher & Arun S. Malik & Robert G. Haight, 2005. "Not Getting Burned: The Importance of Fire Prevention in Forest Management," Land Economics, University of Wisconsin Press, vol. 81(2).
  2. ERKKI Koskela & MARKKU Ollikainen, 1997. "Optimal Design of Forest Taxation with Multiple-Use Characteristics of Forest Stands," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(1), pages 41-62, July.
  3. Richard E. Howitt & Siwa Msangi & Arnaud Reynaud & Keith C. Knapp, 2005. "Estimating Intertemporal Preferences for Natural Resource Allocation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 969-983.
  4. Thompson, Matthew P. & Adams, Darius & Sessions, John, 2009. "Radiative forcing and the optimal rotation age," Ecological Economics, Elsevier, vol. 68(10), pages 2713-2720, August.
  5. Hartman, Richard, 1976. "The Harvesting Decision When a Standing Forest Has Value," Economic Inquiry, Western Economic Association International, vol. 14(1), pages 52-58, March.
  6. Reed, William J., 1984. "The effects of the risk of fire on the optimal rotation of a forest," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 180-190, June.
  7. Alvarez, Luis H.R. & Koskela, Erkki, 2006. "Does risk aversion accelerate optimal forest rotation under uncertainty?," Journal of Forest Economics, Elsevier, vol. 12(3), pages 171-184, December.
  8. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, December.
  9. Gong, Peichen & Löfgren, Karl-Gustaf, 2005. "Impact of Risk Aversion on Optimal Rotation Age," UmeÃ¥ Economic Studies 666, Umeå University, Department of Economics.
  10. Jonathan Yoder, 2004. "Playing with Fire: Endogenous Risk in Resource Management," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 933-948.
  11. Tassone, Valentina C. & Wesseler, Justus & Nesci, Francesco S., 2004. "Diverging incentives for afforestation from carbon sequestration: an economic analysis of the EU afforestation program in the south of Italy," Forest Policy and Economics, Elsevier, vol. 6(6), pages 567-578, October.
  12. Asante, Patrick & Armstrong, Glen W. & Adamowicz, Wiktor L., 2011. "Carbon sequestration and the optimal forest harvest decision: A dynamic programming approach considering biomass and dead organic matter," Journal of Forest Economics, Elsevier, vol. 17(1), pages 3-17, January.
  13. Englin, Jeffrey E. & Boxall, Peter C. & Hauer, Grant, 2000. "An Empirical Examination Of Optimal Rotations In A Multiple-Use Forest In The Presence Of Fire Risk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(01), July.
  14. Tahvonen, Olli & Salo, Seppo, 1999. "Optimal Forest Rotation within SituPreferences," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 106-128, January.
  15. Guitart, A. Bussoni & Rodriguez, L.C. Estraviz, 2010. "Private valuation of carbon sequestration in forest plantations," Ecological Economics, Elsevier, vol. 69(3), pages 451-458, January.
  16. Luis H. R. Alvarez & Erkki Koskela, 2004. "Taxation and Rotation Age under Stochastic Forest Stand Value," CESifo Working Paper Series 1211, CESifo Group Munich.
  17. Gutrich, John & Howarth, Richard B., 2007. "Carbon sequestration and the optimal management of New Hampshire timber stands," Ecological Economics, Elsevier, vol. 62(3-4), pages 441-450, May.
  18. Graeme Guthrie & Dinesh Kumareswaran, 2009. "Carbon Subsidies, Taxes and Optimal Forest Management," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(2), pages 275-293, June.
  19. Adam J. Daigneault & Mario J. Miranda & Brent Sohngen, 2010. "Optimal Forest Management with Carbon Sequestration Credits and Endogenous Fire Risk," Land Economics, University of Wisconsin Press, vol. 86(1), pages 155-172.
  20. Newell, Richard G. & Stavins, Robert N., 2000. "Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 211-235, November.
  21. Pohjola, J. & Valsta, L., 2007. "Carbon credits and management of Scots pine and Norway spruce stands in Finland," Forest Policy and Economics, Elsevier, vol. 9(7), pages 789-798, April.
  22. Benitez, Pablo C. & Obersteiner, Michael, 2006. "Site identification for carbon sequestration in Latin America: A grid-based economic approach," Forest Policy and Economics, Elsevier, vol. 8(6), pages 636-651, August.
  23. COUTURE Stephane & REYNAUD Arnaud, 2006. "Multi-stand Forest Management Under a Climatic Risk: Do time and Risk Preferences Matter?," LERNA Working Papers 06.17.210, LERNA, University of Toulouse.
  24. Seppo Salo & Olli Tahvonen, 2004. "Renewable Resources with Endogenous Age Classes and Allocation of Land," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 513-530.
  25. 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.
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 in new window

Cited by:
  1. Pukkala, Timo, 2011. "Optimizing forest management in Finland with carbon subsidies and taxes," Forest Policy and Economics, Elsevier, vol. 13(6), pages 425-434, July.
  2. Cerdá, Emilio & Martín-Barroso, David, 2013. "Optimal control for forest management and conservation analysis in dehesa ecosystems," European Journal of Operational Research, Elsevier, vol. 227(3), pages 515-526.
  3. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
  4. G. Cornelis van Kooten & Tim Bogle & Frans P. de Vries, 2012. "Rent Seeking and the Smoke and Mirrors Game in the Creation of Forest Sector Carbon Credits: An Example from British Columbia," Working Papers 2012-06, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  5. Susaeta, Andres & Chang, Sun Joseph & Carter, Douglas R. & Lal, Pankaj, 2014. "Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States," Journal of Forest Economics, Elsevier, vol. 20(1), pages 47-64.
  6. Gren, Ing-Marie & Carlsson, Mattias & Elofsson, Katarina & Munnich, Miriam, 2012. "Stochastic carbon sinks for combating carbon dioxide emissions in the EU," Energy Economics, Elsevier, vol. 34(5), pages 1523-1531.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:tse:wpaper:22034. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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