Nonconvexities in the production of timber, biodiversity, and carbon sequestration

Fixed logging costs and administrative constraints on logging regulations can create nonconvexities in forestry production sets that include timber and nontimber products. Managing forests to produce multiple values at a landscape level, through the aggregation of stands that are completely or partially specialized in the production of timber or nontimber products, can consequently be superior to management systems that treat all stands uniformly, even when all stands are identical. Both fixed costs and administrative constraints are empirically important sources of nonconvexity in tropical rainforests. The former is more important when the nontimber product is carbon sequestration, while the latter is more important when the nontimber product is biodiversity protection. Uniform management appears to be superior for the joint production of timber and carbon sequestration, while specialized management might often be superior for the joint production of timber and biodiversity, at least at low discount rates. (C) 2003 Elsevier Science (USA). All rights reserved.