Forest Management, Public Goods, and Optimal Policies

Abstract

This review examines the provision of public goods and the prevention of negative externalities in forest management. It focuses on three issues: (a) biodiversity conservation and maintenance, (b) the role of forestry in carbon policies, and (c) internalizing negative water externalities. Public goods and negative externalities appear differently under different forest management regimes. A distinction is made between even-aged management, defined by the rotation framework, and uneven-aged management, defined by continuous cover models. Although the review focuses mostly on analytical models, it briefly considers recent numerical models relying on the detailed description of forest management. Both conventional instruments and new payments for ecosystem services are discussed.