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