Biodiversity Conservation in Forestry: Essays on the Economics of Site Selection

The purpose of this thesis is to investigate the economics of biodiversity maintenance in boreal forests. From the many tasks available in forest management to improve biodiversity maintenance, the focus is on the lengthening of forest rotation and strict protection, i.e., protected areas. Accordingly, the analysis basis on two different models named forest rotation model and site selection model. Moreover, both socially optimal and cost-effective conservation are considered. The data consists of 32 old-growth stands from northern Finland. The four studies of this dissertation provide evidence of the non-negligible economic consequences of taking biodiversity services into account along with timber production in the forest management. Study I shows that theoretically the optimal management of initial stands involves three alternatives: immediate clear cutting, delayed harvesting, and protection. Moreover, the numerical analysis reveals that taking into account the biodiversity services along with timber production results in considerably longer optimal rotation than in pure timber production management. Delayed harvesting is the most common option for socially optimal management of old-growth forests. However, the integrated approach results also in strict protection of some stands. Study II compares alternative approaches, named integrated, ecological and penny pincher selection, for selecting forest reserves. It suggests the integrated selection leads to 9–19% higher conservation cost-efficiency than the other selections. The integrated selection takes into account both the economic value and ecological features of the stands as the other selections focus only on one of these aspects. It seems also that the xeric forest type may be under-represented in the current old-growth forest preservation network in the studied region. Study III analyses the performance of alternative biodiversity indicators used in the selection of protected areas. It shows that the use of indicators likely results in a loss of species and, therefore, a complete species inventory is necessary if the goal is to maintain all species in the landscape. However, the use of indicators seems to be an economically more efficient practice than to execute a large species survey for habitat protection. Study IV examines the relative merits of alternative biodiversity conservation targets for forestry, which give different weights to species according to their conservation status and assumed population persistence. Also, socially optimal conservation is solved as a benchmark by maximizing the benefits from timber production and biodiversity services. According the results it is optimal to protect 16 out of 32 stands. Alternative conservation goals give different characters in terms of benefit-cost tradeoffs. More specifically goals relying on complementarity between protected stands result in great marginal costs at a high conservation level.