Kari Hyytiäinen

Economics of Forest Thinnings and Rotation Periods for Finnish Conifer Cultures

In this study simultaneous optimization of thinnings and clear-cutting was investigated. The density-dependent whole-stand model was specified for all relevant Finnish Norway spruce (Picea abies (L.) Karst.] and Scots pine (Pinus sylvestris L.) site indices and solved by non-linear programming. Sensitivity analysis showed that in some cases and owing to endogenous thinnings the optimal rotation length may increase with the rate of interest and site fertility, and decrease with harvesting cost. The number of thinnings is more sensitive to changes in the rate of interest, logging conditions and site productivity for Scots pine stands than for Norway spruce stands. Economic optimization suggests that for both species the first thinning should be performed later than officially recommended. The last thinning should be heavier than officially recommended, especially at high rates of interest. This increases the optimal rotation length compared with solutions under restricted thinning intensity.

Maximum Sustained Yield, Forest Rent or Faustmann: Does it Really Matter?

The efficiency gains when harvests are determined using the Faustmann approach instead of Maximum Sustained Yield (MSY), Forest Rent or some silvicultural rules were studies. The analysis was based on a variable-density stand growth model and computations over all admissible combinations of initial stand age and basal area for Finnish Norway spruce and Scots pine sites. Following MSY or Forest Rent led to a major reduction in the economic value of especially highly stocked stands. Finnish silvicultural recommendations (an example of silvicultural rules) encouraged production of higher than optimal quality timber. Applying Forest Rent, MSY or silvicultural recommendations led to respective reductions of 63%, 30% and 13% in the value of a typical conifer forest at a 4% rate of interest. The results also showed that an increase in the rate of interest may lengthen the ongoing rotation if the initial state falls outside the optimal path initiated at bare land.

An economic-ecological model to evaluate impacts of nutrient abatement in the Baltic Sea

This paper presents a coupled economic-ecological model that integrates a catchment model with a marine model and incorporates economic data to analyse the long-term economic and ecological consequences of nutrient abatement in the Baltic Sea. The spatially explicit model describes dynamics of soil phosphorus in arable land, developments of nutrient concentrations and phytoplankton biomass in the sea basins, and inter-annual variation in nutrient loads and biophysical processes. The performance of the model is demonstrated by computing the least-cost solution to reach the good environmental state of the sea - as implied by the Baltic Sea Action Plan - within a time span of 40 years. The total cost of achieving this target is 1487?M? annually. Spatially optimal allocation of load reductions differs from the load reduction targets of the Baltic Sea Action Plan, and focuses more on the control of phosphorus loads. We combine catchment and marine models to analyse the economics of nutrient abatement.The model framework incorporates economic and ecological data.We solve for the cost-efficient way to reduce phytoplankton in the Baltic Sea.

Effects of initial stand states on optimal thinning regime and rotation of Picea abies stands

Abstract This study analysed the effects of young stand characteristics on optimal thinning regime and length of rotation periods for even-aged Norway spruce [Picea abies (L.) Karst.] stands. Stand development was based on a distance-independent, individual-tree growth model. The young stand data were collected from 12 well-stocked Norway spruce stands in southern Finland. Results showed that optimal thinning regimes and rotation period depend on site quality and initial stand characteristics. At the first thinning, optimal thinning type depended on initial density. Thinning from both ends of the diameter distribution turned out to be optimal for initially dense stands. At the second and subsequent thinnings, thinning from above was clearly superior. At a low interest rate, thinning from below was optimal for the first thinning regardless of stocking level. For the study data, optimal rotation periods varied from 61 to 92 years at 3% interest rate. The high variation in length of rotation period was due to the sensitivity of optimal length of rotation period to site qualities, initial stand structure and density.

Cost-Effective Marine Protection - A Pragmatic Approach

This paper puts forward a framework for probabilistic and holistic cost-effectiveness analysis to provide support in selecting the least-cost set of measures to reach a multidimensional environmental objective. Following the principles of ecosystem-based management, the framework includes a flexible methodology for deriving and populating criteria for effectiveness and costs and analyzing complex ecological-economic trade-offs under uncertainty. The framework is applied in the development of the Finnish Programme of Measures (PoM) for reaching the targets of the EU Marine Strategy Framework Directive (MSFD). The numerical results demonstrate that substantial cost savings can be realized from careful consideration of the costs and multiple effects of management measures. If adopted, the proposed PoM would yield improvements in the state of the Baltic Sea, but the overall objective of the MSFD would not be reached by the target year of 2020; for various environmental and administrative reasons, it would take longer for most measures to take full effect.

Water protection in the Baltic Sea and the Chesapeake Bay: Institutions, policies and efficiency

The Baltic Sea and the Chesapeake Bay share many characteristics. Both are shallow, brackish marine areas that suffer from eutrophication. Successful policies targeting point source pollution have lowered nutrient loads in both areas, but achieving the desired marine quality will require further abatement: efforts may be extended to more complicated and expensive pollution sources, notably agricultural nonpoint loads. Despite their ecological similarities, the two watersheds have different histories and institutional settings and have thus adopted different policies. Comparing and contrasting the policies reveal ways to improve the efficiency of each and ways to avoid the path of trial and error. No comparison of the parallel protection efforts, which involve expenditures of hundreds of millions of dollars annually, has been carried out to date. The present paper analyzes the policies applied in the two regions, distilling the results into six recommendations for future steps in preserving what are valuable sea areas.

The Role of Economics in Ecosystem Based Management: The Case of the EU Marine Strategy Framework Directive; First Lessons Learnt and Way Forward.

The EU Marine Strategy Framework Directive (MSFD) sets out a plan of action relating to marine environmental policy and in particular to achieving ‘good environmental status’ (GES) in European marine waters by 2020. Article 8.1 (c) of the Directive calls for ‘an economic and social analysis of the use of those waters and of the cost of degradation of the marine environment’. The MSFD is ‘informed’ by the Ecosystem Approach to management, with GES interpreted in terms of ecosystem functioning and services provision. Implementation of the Ecosystem Approach is expected to be by adaptive management policy and practice. The initial socio-economic assessment was made by maritime EU Member States between 2011 and 2012, with future updates to be made on a regular basis. For the majority of Member States, this assessment has led to an exercise combining an analysis of maritime activities both at national and coastal zone scales, and an analysis of the non-market value of marine waters. In this paper we examine the approaches taken in more detail, outline the main challenges facing the Member States in assessing the economic value of achieving GES as outlined in the Directive and make recommendations for the theoretically sound and practically useful completion of the required follow-up economic assessments specified in the MSFD.

Model for quantifying the synergies between farmland biodiversity conservation and water protection at catchment scale

This paper studies joint provision of two environmental non-market commodities related to agriculture: biodiversity conservation and water protection. We provide an optimising tool for analysing spatial dependencies of multifunctional agriculture at catchment scale. We show that efficiency gains can be achieved by spatial allocation and choice of the type of vegetation. In particular, inclusion of meadow nectar plants in the founding grass seed mixture of set-asides was found out to be an economically efficient measure to promote biodiversity and water protection on warm, steep slopes.

The Baltic Sea as a time machine for the future coastal ocean

Science-based, multinational management of the Baltic Sea offers lessons on amelioration of highly disturbed marine ecosystems. Coastal global oceans are expected to undergo drastic changes driven by climate change and increasing anthropogenic pressures in coming decades. Predicting specific future conditions and assessing the best management strategies to maintain ecosystem integrity and sustainable resource use are difficult, because of multiple interacting pressures, uncertain projections, and a lack of test cases for management. We argue that the Baltic Sea can serve as a time machine to study consequences and mitigation of future coastal perturbations, due to its unique combination of an early history of multistressor disturbance and ecosystem deterioration and early implementation of cross-border environmental management to address these problems. The Baltic Sea also stands out in providing a strong scientific foundation and accessibility to long-term data series that provide a unique opportunity to assess the efficacy of management actions to address the breakdown of ecosystem functions. Trend reversals such as the return of top predators, recovering fish stocks, and reduced input of nutrient and harmful substances could be achieved only by implementing an international, cooperative governance structure transcending its complex multistate policy setting, with integrated management of watershed and sea. The Baltic Sea also demonstrates how rapidly progressing global pressures, particularly warming of Baltic waters and the surrounding catchment area, can offset the efficacy of current management approaches. This situation calls for management that is (i) conservative to provide a buffer against regionally unmanageable global perturbations, (ii) adaptive to react to new management challenges, and, ultimately, (iii) multisectorial and integrative to address conflicts associated with economic trade-offs.