Post on 23-Feb-2016
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Land Allocation and Multiple Use
FRST 318, March 12, 2013
Harry Nelson 2010
Economic Issues Determining:
Land Allocation: Identifying the use that will generate the greatest value
Selecting among alternative forest management approaches: Choosing the use or combination of uses that will
maximize return
Management Intensity: Given forest management objective most efficient use of
inputs
Allocation Between Alternative Uses
We are often forced to decide between alternative uses like agriculture, forestry, recreation, etc.
In order to decide which option to pursue, we must determine the rents generated under different land use scenarios and compare them.
A number of factors will affect how much rent is ultimately generated.
Example of a Land Use Decision
Distance from market (or urban centre) can be an important factor when it comes to land use decisions.
Land Rent ($)
Distance from Urban Centre (km)
Commercial
Residential
Farming
Forestry
a b c d eSo not just productivity, climate, etc…
Identifying Optimal Use
The rule is to maximize differential rent Differential rent is the rent generated in excess of the
opportunity cost.
But keep in mind markets are imperfect when it comes to allocating land among alternative uses as markets often fail to capture externalities. (reasons why we provide preferential tax treatment
for agricultural land, forest land)
Harry Nelson 2010
Detroit…
http://www.hantzfarmsdetroit.com
The Extensive Margin Top panel shows market
for timber The bottom panel
illustrates how much land can be used profitably for timber production
While more productive land earns rent
But the last hectare-the least productive-earns no rent
This last hectare-limit of rent-is the extensive margin
price$/m3
P
q Annual harvest
Productive timberland(hectares)
supply
demand
Intensity of Forest Management
Choosing the optimal combination of labour and capital to generate maximum land rent
General rule is to keep applying the input up to the point the benefit (marginal revenue gained from employing it) equals the cost
The point where marginal revenue product (MRP) equals the marginal cost of labour (wage) defines the intensive margin of land use.
Payment to labour
Land Rent
Value of forest crop$/ha
Marginal revenue product of labour $
P wage
q
Quantity of Labour
Quantity of Labour
Efficient quantity of labour
Example: PruningManaging trees in a radiata pine woodlot Pruning and thinning are carried out to improve tree growth and timber quality.
Timing depends on how well trees are growing, on the site selected.
A shelter-belt or timber-belt has a lot of outside edge, with potential to grow extra volume of timber, being exposed to extra light and fertility from adjacent pasture. A good regime is:
Prune all possible stems annually
Prune as high as possible, leaving a green crown of one half to one third of the tree height at all times.
Annual average volume and net revenue, maximizing either net revenues or volume
Scenario 1 (no volume constraints)
Scenario 2(even flow -2.8-
3.3)
Scenario 3 (even flow -
3.0-3.5)
Scenario 4(even flow -3.5-
4.0)
Scenario 5(volume
maximization)
Annual average volume (m3)
288,230 293,215 306,216 383,064 823,745
Annual average net revenue
$3,515,727 $1,191,596 $685,918 ($536,244) ($2,473,528)
Annual Average Harvest Levels under Core Scenarios
Allocation among Multiple Uses
Three key questions: Is the proposed use technically feasible? Is the proposed use socially and economically desirable? How much of the land do we allocate to this particular
use?
Production Possibilities The key idea is that a trade-off must be made (most of
the time) when choosing between alternatives:
Timber
Recreation
Example: Timber harvesting and recreation
Could have OT timber, no recreation…Or OR recreation, no timber…or some combination on the curve R
T
O
Mutually Exclusive Uses
Ex: Timber harvest vs. Preservation for scientific research
Timber Harvest
Preservation
Highly Conflicting Uses
Example: Timber harvest has a major initial impact on amenity values, but only incremental impacts afterwards
Timber Harvest
Recreation
Constantly Substitutable Uses
Ex: Harvesting for industrial timber vs. Harvesting for fuel
Industrial Timber
Fuel
Independent Uses
Ex: Watershed management vs. Recreational values
Watershed Management
Recreation
Complementary Uses
Example: Forest management vs. Wildlife habitat
Timber harvest management
Wildlife habitat
Production Possibilities
So returning to the traditional production possibility frontier
We will have multiple use when we face this kind of trade-off where Point O represents the optimal combination
What is important here is the tradeoff is determined by the relative value of the alter-natives; that is, the slope of the exchange line
Harry Nelson 2010
Alternative A
Alternative Bb Vb
Va
a O
Other Production Possibilities Would also have multiple use where we have
independent uses and complementary uses But where land use is mutually exclusive or highly
conflicting you should specialize This is also the case where they are constantly
substitutable (pick the one generating the highest rent)
Harry Nelson 2010
Triad Approach
Economic Results
So What Do We Do in BC?
So What Do We Do in BC?
Land Use Planning Land and Resource
Management Plans (LRMPs) started in 1996
“Multistakeholder” groups develop plans for government approval
Zoning approach protected sensitive integrated uses intensive forestry
Completed for 85% of the province
BC Liberals “New Direction” ILMB Report:
A New Direction for Strategic Land Use Planning in BC (December 2006)
Brings end to provincial scale, comprehensive strategic land use planning
New planning will be undertaken only where business drivers demonstrate a need New policy and legislative changes FNs’ interests and values Major environmental changes such as Mountain Pine Beetle
infestation
Forest Conservation PolicyApproaches
Coarse Filter Land use – protected areas and zoning
Fine filter Species at Risk Legislation (Federal) Identified Wildlife Management Strategy (Provincial)
27
Conservation and Protected Areas in BC
As of March 2011, 14.27%, or 13.5 million hectares of land, is the overall size of the protected areas system in the whole of the province of British Columbia (this includes national parks and national park reserves, as well as provincial parks and protected areas).
Class A, B, and C Parks
Conservancies
Recreation Areas
Ecological Reserves
http://atlas.nrcan.gc.ca/site/english/maps/environment/protectedarea/protectedareasthroughtime
A number of recent Forest Practices Board reports highlight:• The lack of an integrated, landscape level, strategic planning process.
Managing Forest Land
Courtesy: Ken Zielke
Rules and constraints in a typical BC Management Unit
Site plans Sustainable Forest Management Plans for Certification
Forest Stewardship Plans
TFL Management Plans
Timber Supply Reviews
Silviculture Strategies
Forest Operations Schedules
Habitat Supply modelling & Plans
Community Wildfire Protection Plans
IFPA Forestry Plans
Forest Health Strategies
LRMPs and LU plansGAR ordersLand use orders
Ecosystem Restoration Plans
Climate Change Strategies
IWAPCWAP
Courtesy: Ken Zielke
BC’s forest management is:• Leading to declines in forest
diversity.
• Creating a growing understocked area.
• Not adequately addressing future timber supply problems.
• Harvesting high value species and reforesting with lower value species.
• Not dealing adequately with climate change.
We need to define and commit to:
• Clear timber objectives
• Stewardship principles
• Performance measures
Courtesy: Ken Zielke
Bill 8: Converting Volume-based to area-based
VICTORIA - Forest Act amendments introduced today will help improve forest stewardship and support community resiliency in mountain pine beetle impacted areas.
The legislation fulfils recommendations made by the Special Committee on Timber Supply in their August 2012 report, which was based on public hearings and written submissions from First Nations, local communities, industry stakeholders and the public.
The legislation proposes a new section 34.1 be added to the Forest Act that will create the ability to convert volume-based forest licences to area-based tree farm licences at the minister's invitation. Invitations will be publicly advertised, and applicants must make their application for an area-based licence available for public review and comment for at least 60 days and indicate how they have incorporated public feedback before submitting to the minister.
The minister may reject an application if the best interests of the public are not met. This summer, the ministry will consult with the public on the evaluation criteria and use the results to refine policy before the first application for a conversion to an area-based tenure occurs.
http://www.newsroom.gov.bc.ca/2013/02/new-legislation-supports-mid-term-timber-supply.html
(BILL 8)