Economics of boreal conifer species in continuous cover and clearcut forestry

Tämä tutkimus optimoi boreaalisten alueiden havupuiden metsänhoitomenetelmän valintaa yhden puulajin metsissä. Tutkimuksessa mukana olevat lajit ovat kuusi (Picea abies (L.) Karst.) ja mänty (Pinus sylvestric L.). Tutkimuskysymyksenä on ”onko eri-ikäisrakenteinen metsänhoito edullisempaa kuuselle, kuin männylle?”. Tutkimuksessa myös tarkastellaan optimiratkaisuja Suomen vuoden 2014 metsälain valossa. Suurimmassa osassa aihepiirin aiempia tutkimuksia on käytetty taloustieteellisesti ongelmallisia malleja, sekä tarpeettomia rajoituksia. Tämän tutkimuksen optimoinnissa käytetään teoreettisesti vankkaa mallia, jossa metsänhoitotavan valinta tapahtuu osana mallin optimiratkaisua. Mallissa käytetään empiirisesti estimoitua kasvumallia, sekä yksityiskohtaista kuvausta hakkuukustannuksista. Tutkimuksessa käytetään ja vertaillaan kahta eri kasvumallia. Optimointi muodostuu kaksitasoiseksi ongelmaksi, jossa harvennusten ajankohta on ylemmän ja intensiteetti alemman tason ongelma. Optimointi tehdään hyödyntäen sisäpistemenetelmiä alemman tason ongelmaan ja geneettistä sekä hill-climbing algoritmia ylemmän tason ongelmaan. Tulokset osoittavat huomattavia eroja männyn ja kuusen välillä, joiden suuruus riippuu käytetystä kasvumallista. Tuloksista käy ilmi että heikohkossa ja heikossa kasvupaikassa eri-ikäisrakenteinen metsänhoito on edullisempaa kuuselle kuin männylle. Tämän edullisuuden suuruus ja optimiratkaisujen yksityiskohdat riippuvat oleellisesti käytetystä kasvumallista. Optimaalinen eri-ikäisrakenteinen metsänhoito johtaa männyllä alhaisiin metsän tiheyksiin. Lähes kaikki taloudellisesti optimaaliset ratkaisut ovat lisäksi laittomia niiden alhaisen hehtaarikohtaisen puumäärän tai pohjapinta-alan vuoksi.This study optimizes the management regime of boreal Norway spruce (Picea abies (L.) Karst.) and Scots pine (Pinus sylvestric L.) stands. The aim is to compare the economic profitability of continuous cover management and clearcut management and to study the hypothesis that continuous cover forestry is more favorable in the case of Norway spruce, compared to Scots pine. Additionally, the study analyses the outcomes of two different growth models for these tree species and compares the results with the requirements of the Finnish Forest Act of 2014. Earlier studies comparing the suitability of Norway spruce and Scots pine to continuous cover forestry have applied unclear model specifications and unnecessary limitations in the optimization methods. In this study, the optimization is carried out using a theoretically sound economic optimization model that determines the choice of the management regime as an outcome of the optimization. The model uses empirically estimated ecological growth models and includes both fixed and variable harvesting costs. Two different empirically estimated ecological growth models are used and compared. The optimization model is solved as a bi-level problem where harvest timing is the upper-level problem and harvesting intensity the lower-level problem. The optimization is solved using gradient-based methods for the lower-level problems and genetic and hill-climbing algorithms for the upper-level problems. This is the first study using this method to solve optimal continuous cover solutions for Scots pine. The results show that the main differences in optimal solutions between the two species are independent of the ecological two growth models used. According to both ecological models, continuous cover forestry is less favorable for Scots pine compared to Norway spruce, in both low and average fertility sites. However, the magnitude of this favorability and the characteristics of the optimal solutions strongly depend on the ecological model. Optimal continuous cover solutions for Scots pine are also found to have very low stand densities. Almost all economically optimal solutions are illegal because of their low number of trees or basal area per hectare

On the economics of continuous cover and rotation forestry

This dissertation studies the stand-level economics of continuous cover and rotation forestry. The main method of this dissertation is economic-ecological optimization, where statistical-empirical size-structured ecological models are coupled with economic optimization models including fully flexible optimization between continuous cover and rotation forestry. The dissertation consists of a summary section and three original research articles. The first article compares the favourability of continuous cover forestry between pure Norway spruce (Picea abies (L.) Karst.) and Scots pine (Pinus sylvestris L.) stands and studies the effects of ecological models on economically optimal solutions. The second article studies the economics of mixed-species stands with up to four tree species. The third article studies the economics of arctic forestry in the homeland region of the Sámi people using a model that simultaneously includes timber production, carbon storage, and negative externalities of forestry on reindeer husbandry. According to the results, the differences in continuous cover forestry favourability between tree species are largely dependent on both species-specific differences in natural regeneration and natural regeneration differences between ecological models. Under realistic economic parameters, our model specification yields the result that continuous cover forestry is optimal for Norway spruce in both single- and mixed-species stands. In contrast, Scots pine favours rotation forestry in both single- and mixed-species stands. Physical overyielding of a species mixture does not reveal the economic preferability of that species mixture. In addition, we demonstrate that economically optimal continuous cover forestry avoids “high grading”, i.e. selective harvesting that leads to a completely different and economically inferior outcome. Including the negative externalities of forestry on reindeer husbandry into the economic model favours continuous cover forestry in arctic Scots pine stands. A carbon price between €14–€20/tCO2 is enough to imply that saving old-growth forests as carbon storages and reindeer pastures becomes optimal.Tässä väitöskirjassa tutkitaan jaksollisen ja jatkuvapeitteisen metsänhoidon taloudellista kannattavuutta kuviotasolla. Päämenetelmänä on taloudellis-ekologinen optimointi, jossa tilastollis-empiirinen kokoluokkarakenteinen ekologinen malli yhdistetään taloudelliseen optimointimalliin, joka sisältää optimoinnin jaksollisen ja jatkuvapeitteisen metsänhoidon välillä. Väitöskirja koostuu yhteenveto-osasta ja kolmesta tutkimusartikkelista. Ensimmäisessä tutkimusartikkelissa vertaillaan jatkuvapeitteisen metsänhoidon taloudellista kannattavuutta kuusen (Picea abies (L.) Karst.) ja männyn (Pinus sylvestris L.) välillä sekä ekologisten kasvumallien vaikutusta optimituloksiin. Toisessa tutkimusartikkelissa tutkitaan sekametsiä sisällyttäen malliin samanaikaisesti jopa neljä puulajia. Kolmannessa tutkimusartikkelissa tutkitaan arktisen metsänhoidon taloutta saamelaisten kotiseutualueella soveltaen optimointimallia, joka sisältää samanaikaisesti niin puuntuotannon, hiilensidonnan kuin metsätalouden negatiiviset ulkoisvaikutukset poronhoidolle. Tulosten mukaan puulajien väliset erot jatkuvapeitteisen metsänhoidon taloudellisessa kannattavuudessa riippuvat suurelta osin puulajikohtaisista eroista luontaisessa uudistumisessa sekä ekologisten mallien välisistä eroista luontaisen uudistumisen kuvauksessa. Jatkuvapeitteinen metsänhoito on sovelletuilla malleilla ja realistisilla talousparametreilla taloudellisesti optimaalista kuuselle niin yhden puulajin kuin sekametsien tapauksissa. Mänty taas suosii jaksollista metsänhoitoa sekä yhden puulajin että sekametsien tapauksissa. Puulajisekoituksen tuotos kuutiometreissä ei paljasta kyseisen puulajisekoituksen taloudellista kannattavuutta. Väitöskirjassa osoitetaan taloudellisesti optimaalisen jatkuvapeitteisen metsänhoidon välttävän niin sanottua ”harsintaa”, joka johtaa täysin erilaiseen ja taloudellisesti heikompaan lopputulokseen. Metsätalouden poronhoidolle aiheuttamien negatiivisten ulkoisvaikutusten huomiointi suosii jatkuvapeitteistä metsänhoitoa arktisissa mäntymetsissä. Jo 14–20 €/tCO2 hiilen hinnasta seuraa, että vanhojen metsien käyttö hiilivarastoina ja porolaitumina tulee taloudellisesti optimaaliseksi

Economics of multifunctional forestry in the Sámi people homeland region

We study forestry in the Sámi people homeland to understand an ongoing conflict between conventional forestry and maintaining forests as reindeer pastures vital for indigenous Sámi livelihood. Conventional logging affects pastures by creating stand densities suboptimal to lichen growth and by decreasing old-growth forest areas, both of which are essential to reindeer survivability during the subarctic winter. Our model includes timber production, carbon sequestration, externalities on reindeer husbandry, and optimization between rotation forestry and forestry with continuous forest cover. We show that the profitability of conventional forestry relies on utilizing existing forests, an outcome we label as forest capital mining. By varying the carbon price between €0 and €60 per tCO2 and assuming a 3% interest rate, we show that continuous cover forestry, which better preserves pastures, is always optimal. A carbon price of €60 − €100 chokes off timber production. Given the present management practices and an oldgrowth forest as the initial state, the carbon choke price decreases to €14–€20. Our economic analysis on maintaining old-growth forest versus conversion to timber production is an alternative to the frequently applied approach based on carbon debts and carbon payback periods.Peer reviewe

Optimizing high-dimensional stochastic forestry via reinforcement learning

In proceeding beyond the generic optimal rotation model, forest economic research has applied various specifications that aim to circumvent the problems of high dimensional-ity. We specify an age-and size-structured mixed-species optimal harvesting model with binary variables for harvest timing, stochastic stand growth, and stochastic prices. Rein-forcement learning allows solving this high-dimensional model without simplifications. In addition to presenting new features in reservation price schedules and effects of stochas-ticity, our setup allows evaluating the simplifications in the existing research. We find that one-or two-dimensional models lose a high fraction of attainable economic output while the commonly applied size-structured matrix model overestimates economic profitability, yields deviations in harvest timing, including optimal rotation, and dilutes the effects of stochasticity. Reinforcement learning is found to be an efficient and promising method for detailed age-and size-structured optimization models in resource economics. (c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license ( http://creativecommons.org/licenses/by/4.0/ )Peer reviewe

Economics of boreal conifer species in continuous cover and rotation forestry

201

Including soil alters the optimization of forestry with carbon sinks

We integrate a carbon net sink and stand-level wood production to analyze their simultaneous optimization as an economic problem. Carbon is included in living trees, wood products, and forest soil. Forestry is specified by a size-structured model for optimizing thinning timing and intensity, rotation period, and the optimal choice of rotation versus continuous cover forestry. The optimal inclusion of a carbon net sink increases the carbon pool mainly in living trees and forest soil, while the effect on the product carbon pool remains minor. With a 3% interest rate, increasing the CO2 price to euro40 per tCO2 increases the total steady-state carbon pool by 131% and the soil carbon accounts for ca. 60% of the increased carbon storage. Omitting soil carbon, as in previous studies, leads to underestimates of the carbon sink, significantly decreasing the optimal total CO2 net sink and achievable economic net gain from joint wood production and carbon management. The inclusion of soil carbon suggests that, in contrast to previous results, a higher CO2 price does not necessarily favor continuous cover forestry.Peer reviewe