Effect of Input Assumptions on Potential Sustainable Harvest Levels B. Bruce Bare College of Forest...

Effect of Input Effect of Input Assumptions on Assumptions on

Potential Sustainable Potential Sustainable Harvest LevelsHarvest Levels

B. Bruce BareB. Bruce Bare

College of Forest ResourcesCollege of Forest Resources

University of Washington, SeattleUniversity of Washington, Seattle

February 28, 2001February 28, 2001

B. Bruce BareB. Bruce Bare

College of Forest ResourcesCollege of Forest Resources

University of Washington, SeattleUniversity of Washington, Seattle

February 28, 2001February 28, 2001

2

OutlineOutline

• Definition of key termsDefinition of key terms

• Input parameters to considerInput parameters to consider

• Sample sustainable harvest Sample sustainable harvest calculations for western Washingtoncalculations for western Washington

3

OutlineOutline




4

Definitions Definitions

• Sustained yield: Management of the forest to provide harvesting on a continuing basis without major prolonged curtailment or cessation of harvest. (RCW 79.68.030)

5

DefinitionsDefinitions

• Sustainable harvest: The volume of timber scheduled for sale from state-owned lands during a planning decade as calculated by the department of natural resources and approved by the board of natural resources.

• Planning decade: The ten-year period covered in the forest land management plan adopted by the board of natural resources. (RCW 79.68.035)

6


• Even flowEven flow: A sustainable harvest : A sustainable harvest wherein the planned wherein the planned salesale volume volume remains remains constantconstant from one decade to from one decade to the next over the planning horizon.the next over the planning horizon.

• Note: This interpretation of sustained yield is more rigorous than required by the RCW definition but was adopted by the board of natural resources.

7

CommentComment

• Usually, an even flow interpretation Usually, an even flow interpretation is is more constrainingmore constraining and, hence, and, hence, more more costlycostly to the trusts than a to the trusts than a more more flexibleflexible interpretation interpretation permissible under RCW permissible under RCW 79.68.030.

8


• Nondeclining even flowNondeclining even flow: A sustainable : A sustainable

harvest wherein the planned harvest wherein the planned salesale volume volume

eithereither remains remains constantconstant or or increasesincreases

from one decade to the next over the from one decade to the next over the

planning horizon. planning horizon.

• Used by the Used by the U.S.U.S. ForestForest ServiceService and the and the

Bureau of Land ManagementBureau of Land Management..

9


• Multiple use: The management and administration of state-owned lands under the jurisdiction of the department of natural resources to provide for several uses simultaneously (on a single tract and/or planned rotation) of one or more uses on and between specific portions of the total ownership (RCW 79.68.020).

10


• Public lands: Lands belonging to, or held in trust by the state, which are not devoted to or reserved for a particular use by law and include --

• State lands: – Schoolchool lands held in trust for the lands held in trust for the

support of the common schools; support of the common schools;

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– UniversityUniversity lands held in trust for lands held in trust for university purposes; university purposes;

– AgriculturalAgricultural collegecollege lands held in trust lands held in trust for the use and support of agricultural for the use and support of agricultural colleges; colleges;

– ScientificScientific schoolschool lands held in trust for lands held in trust for the establishment and maintenance of the establishment and maintenance of a scientific school; a scientific school;

12


– NormalNormal schoolschool lands held in trust for lands held in trust for state normal schools; state normal schools;

– CapitolCapitol buildingbuilding lands held in trust for lands held in trust for the purpose of erecting public buildings the purpose of erecting public buildings at the state capital for legislative, at the state capital for legislative, executive and judicial purposes; executive and judicial purposes;

– InstitutionalInstitutional lands held in trust for state lands held in trust for state charitable, educational, penal and charitable, educational, penal and reformatory institutions; and reformatory institutions; and

13


– AllAll publicpublic landslands of the state, of the state, exceptexcept tidelandstidelands, , shoreshore landslands, , harborharbor areasareas and the beds of and the beds of navigable waters.navigable waters.

• Lastly, Lastly, forest board transferforest board transfer trusttrust (including (including forest board purchase lands) forest board purchase lands), , andand community and technical college community and technical college forest reserve.forest reserve.

14

OutlineOutline




15

Key ParametersKey Parameters

• LegalLegal

• PolicyPolicy

• ManagerialManagerial

• TechnicalTechnical

• EconomicEconomic

16

Legal ParametersLegal Parameters

• The board of natural resources shall establish policies to ensure that the management of lands and resources within the Department's jurisdiction are based on sound principles designed to achieve "the maximum effective development and use of such lands" (RCW 43.30.150 ).

17


• The department of natural resources shall manage the state-owned lands … on a sustained yield basis insofar as compatible with other statutory directives (RCW 79.68.040).

18


• Washington statutes regarding the administration of the federal grant lands also reflect the primary objective of maximizing the economic returns due the benefiting institutions (AGO No. 11, 1996).

19

Comment Comment

• Case law throughout the West has generally upheld the notion that income generation is a paramount obligation of trustees of Federal grant land.

• Short-termShort-term income income generation must be generation must be balanced against balanced against preservationpreservation of the of the trust in the long-term.trust in the long-term.

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• Duties of trustee run separately to each trust (AGO No. 11, 1996).

• ConsolidationConsolidation of trusts for of trusts for management is permissible where it management is permissible where it serves the serves the economiceconomic interests of interests of each trust each trust (AGO No. 11, 1996).

21

ObservationObservation

• No No legallegal requirement to practice requirement to practice sustainablesustainable forestryforestry..

22

What Is Sustainable Forestry?What Is Sustainable Forestry?

• Managing a forest to meet all Managing a forest to meet all

existing regulations such that existing regulations such that

environmentalenvironmental, , socialsocial and economicand economic

factorsfactors are balanced to meet the are balanced to meet the

needs of the present without needs of the present without

compromising the ability of future compromising the ability of future

generations to meet their needs.generations to meet their needs.

23

What Is Sustainable What Is Sustainable Forestry?Forestry?

• A A land stewardship ethicland stewardship ethic that integrates that integrates reforestation, growing, and harvesting reforestation, growing, and harvesting trees for useful products while trees for useful products while conservingconserving soil, air, and water quality, soil, air, and water quality, wildlife and fish habitat and aesthetics, wildlife and fish habitat and aesthetics, and and protectingprotecting the resource from fire, the resource from fire, pests, and diseases.pests, and diseases.

• ProtectionProtection of lands of special of lands of special significance.significance.

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What Is Sustainable What Is Sustainable Forestry?Forestry?

• Definition conveys notion that sustainability applies to many resources in addition to timber; considers the needs of future generations as well as those of the present; is concerned with ecological functions and conditions; and is as much a social as a bio-physical process.

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• Legislature directs that a Legislature directs that a multiple usemultiple use concept be utilized by the department of concept be utilized by the department of natural resources in the management natural resources in the management and administration of state-owned lands and administration of state-owned lands wherewhere such a concept is in the such a concept is in the best best interestsinterests of the state and the general of the state and the general welfare of the citizens thereof, and is welfare of the citizens thereof, and is consistentconsistent with the applicable with the applicable trust trust provisionsprovisions of the various lands involved of the various lands involved (RCW 79.68.010).(RCW 79.68.010).

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• If multiple uses are not If multiple uses are not compatiblecompatible with the financial obligations of with the financial obligations of management of trust land, they may management of trust land, they may be permitted only if there is be permitted only if there is compensationcompensation satisfying the financial satisfying the financial obligations (RCW 79.68.050).obligations (RCW 79.68.050).

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• LegalLegal

• PolicyPolicy




28

Policy ParametersPolicy Parameters

• The Department will manage state forest lands to produce a sustainable even flow harvest of timber subject to economic, environmental and regulatory considerations. (Forest Resource Plan, 1992)

29

Policy ParametersPolicy Parameters

• Use Use even floweven flow volume regulation volume regulation modelmodel (Forest Resource Plan, 1992) ..

• Calculate sustainable harvest for each Calculate sustainable harvest for each ownershipownership group. group.

• Use of Use of “off base” “off base” acres to meet policy goals.acres to meet policy goals.

• Manage all trusts under a Manage all trusts under a consolidatedconsolidated management plan. management plan.

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• LegalLegal

• PolicyPolicy




31

Managerial ParametersManagerial Parameters

• Ownership groups (W Washington)Ownership groups (W Washington)::– Forest board transferForest board transfer (16 counties) (16 counties)

– Federal grantFederal grant and and forest board purchaseforest board purchase lands lands (5 administrative regions)(5 administrative regions)

– Capitol State ForestCapitol State Forest

– OESFOESF

• A total of A total of 2323 separate separate eveneven flowflow volume volume harvests in western Washington.harvests in western Washington.

32


• Ownership groups (E Washington)Ownership groups (E Washington)::– All All State landsState lands (5 administrative regions) (5 administrative regions)

• A total of A total of 55 separate separate eveneven flowflow volume harvests in eastern volume harvests in eastern Washington.Washington.

• NoNo sustainable harvests determined sustainable harvests determined for any for any individualindividual trust. trust.

33


• Off baseOff base acres do acres do notnot contribute to the contribute to the sustainable harvest. They include lands:sustainable harvest. They include lands:

– too too smallsmall, , isolatedisolated, or , or costlycostly to harvest to harvest

– which can not produce another which can not produce another cropcrop of timber of timber within within 8080 years years

– of of riskrisk to to publicpublic resources resources

– deferreddeferred from from harvestharvest (owl habitat, old (owl habitat, old growth, gene pool, and mature natural stands)growth, gene pool, and mature natural stands)

34


• Off baseOff base acres do contribute to the acres do contribute to the generation of generation of habitathabitat and enhance and enhance non-timbernon-timber forest values. forest values.

35


• LegalLegal

• PolicyPolicy




36

Technical ParametersTechnical Parameters

• Current Current timbertimber inventoryinventory must be must be accurately accurately estimatedestimated using defined using defined merchantabilitymerchantability standards and units. standards and units.

• Growth and yieldGrowth and yield estimates for future estimates for future timber stands must be accurate.timber stands must be accurate.

• Must evaluate a wide-range of Must evaluate a wide-range of silvicultural silvicultural treatmentstreatments to satisfy to satisfy habitathabitat requirements requirements as well as meet as well as meet timbertimber objectives. objectives.

37

Technical ParametersTechnical Parameters

• Historically, use an Historically, use an age-classage-class model model to determine the to determine the sustainablesustainable harvestharvest..

• SimulationSimulation and and linearlinear programmingprogramming models can be used to calculate the models can be used to calculate the sustainable harvest.sustainable harvest.

38


• LegalLegal

• PolicyPolicy




39

Economic ParametersEconomic Parameters

• Should utilize an Should utilize an economic modeleconomic model when when determining the sustainable harvest.determining the sustainable harvest.

• CurrentCurrent and and futurefuture timber timber pricesprices, , costscosts of of management, management, interestinterest ratesrates, etc. must be , etc. must be selected and tested for sensitivity.selected and tested for sensitivity.

• RotationRotation agesages and all and all silviculturalsilvicultural alternativesalternatives must pass an must pass an economic testeconomic test priorprior to use in the sustainable harvest to use in the sustainable harvest calculation.calculation.

40


• Interest rateInterest rate (real):(real): 5%/year 5%/year

• Timber price increase (real):Timber price increase (real): 1%/year 1%/year

• Cost increase (real):Cost increase (real): 1%/year 1%/year

• Initial costs:Initial costs: a) a) reforestationreforestation ($250/ac); ($250/ac); b) b) pre-commercial thinpre-commercial thin ($100/ac); c) ($100/ac); c) annual administrationannual administration ($5/ac). ($5/ac).

41


• Objective of analysis:Objective of analysis: maximize net maximize net present value subject to a variety of present value subject to a variety of constraints. constraints.

42

OutlineOutline




43

Input AssumptionsInput Assumptions

• Western WashingtonWestern Washington DNR forest DNR forest land base map.land base map.

• Six planning areasSix planning areas consisting of consisting of between 113,000 - 381,400 acres.between 113,000 - 381,400 acres.

• Multiple Multiple truststrusts are are consolidated consolidated for for management purposes.management purposes.

44

45

46

47

Planning ScenariosPlanning Scenarios

• DNRDNR: : SimulationSimulation of the 1997 DNR of the 1997 DNR HCP.HCP.

• ALTSALTS: An : An alternativealternative model. model.

48


• Two Two scenariosscenarios differ by: differ by:– acres treated as acres treated as offoff basebase and and

unavailableunavailable for timber production for timber production

– range of possible range of possible silviculturalsilvicultural alternativesalternatives

– minimum permissible minimum permissible rotation agerotation age

– harvest (sale) volume harvest (sale) volume flowflow constraints constraints

49


• DNRDNR: Uses : Uses 60+60+ year rotations; year rotations; on/off base acre on/off base acre allocationsallocations as as shown; no shown; no wildlifewildlife thins; no thins; no partialpartial cuts in the 60-70 year old age cuts in the 60-70 year old age classes; classes; eveneven flowflow harvest volume harvest volume constraints; no harvests in constraints; no harvests in riparianriparian or or wetlandwetland areas; nondeclining areas; nondeclining latelate seralseral conditions. conditions.

50


• ALTSALTS: Uses : Uses 50+50+ year rotations; on/off year rotations; on/off base acre base acre allocationsallocations as shown; as shown; wildlifewildlife thins; thins; partialpartial cuts in the 60- cuts in the 60-70 year old age classes; 70 year old age classes; ++ 25% 25% change in harvest from one decade change in harvest from one decade to the next; partial harvests in to the next; partial harvests in riparianriparian or or wetlandwetland areas if on-base; areas if on-base; nondeclining nondeclining latelate seralseral conditions. conditions.

51

W Washington DNR AcresW Washington DNR AcresRiparian Wetland Riparian Wetland Unstable

Planning Area On Base On Base Off Base Off Base Off BaseNo. Puget 17,429 3,800 7,160 1,295 40,769So. Puget 7,319 3,489 1,720 333 12,370Columbia 17,391 2,542 6,968 509 30,078

Straits 4,886 1,631 1,502 366 9,952So. Coast 16,822 2,229 2,809 505 15,518

OESF 67,771 3,080 28,363 905 33,688Total All

West-Side 131,618 16,771 48,522 3,913 142,375% West-side Ac 9% 1% 3% 0.3% 10%

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NEST NRF NRF DSP DSPPlanning Area Off On Off On Off

No. Puget 13,192 67,072 27,475 19,594 2,658So. Puget 644 1,667 332 56,675 9,927Columbia 6,370 35,583 11,048 20,067 6,968

Straits No Owl Habitat DesignatedSo. Coast No Owl Habitat Designated

OESF No Owl Habitat DesignatedTotal All

West-Side 20,206 104,322 38,855 96,336 19,553% West-side Ac 1% 7% 3% 7% 1%

53

Murrelet Total Planning Area Off Base Acres

No. Puget 2,761 381,403So. Puget 493 141,815Columbia 806 283,021

Straits 92 113,143So. Coast 1,009 240,835

OESF 15,148 265,877Total All

West-Side 20,309 1,426,094% West-side Acres 1%

54

W Washington Acreage W Washington Acreage SummarySummary

ALTS DNRAcres Acres

On Base 1,178,154 1,035,586Off Base 247,937 390,508

Total 1,426,091 1,426,094

55

ModelsModels

• In following results, a In following results, a simulatorsimulator estimates the estimates the consequencesconsequences of a of a defined series of silvicultural defined series of silvicultural alternatives over the 100 year planning alternatives over the 100 year planning horizon.horizon.

• A A linearlinear programmingprogramming model is used to model is used to optimize an objective (usually net optimize an objective (usually net present value) subject to a set of present value) subject to a set of constraints.constraints.

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Asset Values ($ Billion)DNR ALTS % Difference

W Washington 7.505 9.799 31% ACRESNorth Puget 1.945 2.487 28% 381,403South Puget 0.85 1.091 28% 141,815Columbia 1.581 1.976 25% 283,021Straits 0.715 1.034 45% 113,143OESF 0.781 1.379 77% 240,835South Coast 1.416 1.746 23% 265,877Six Unit Total 7.288 9.713 33% 1,426,094% Difference 3% 1%

57

DNR W Washington

050000

100000150000200000250000

Age Class

Acre

s

OFFRIP

UPLND

58

ALTS W Washington

050000

100000150000200000250000

Age Class

Acre

s

OFFRIP

UPLND

59

W Washington Timber Sales(DNR$7.5;ALTS$9.8)

0

500

1000

1500

2000

1 2 3 4 5 6 7 8 9 10

Decade

An

nu

al S

ales

(M

MB

F)

DNR

ALTS

60

W Washington Net Revenue

0

500

1000

1500

2000

1 2 3 4 5 6 7 8 9 10

Decade

An

nu

al N

et

Re

ve

nu

e(M

M$

)

DNR

ALTS

61

W Washington Inventory

0

10

20

30

40

1 2 3 4 5 6 7 8 9 10

Decade

Inve

ntor

y (B

BF)

DNR

ALTS

62

W Washington Old Forest Habitat

0

100

200

300

400

1 2 3 4 5 6 7 8 9 10

Decade

Acr

es ('

000)

DNR

ALTS

63

W Washington DNR Stand Stucture Distribution

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10Decade

Sh

are

of

Str

uct

ure

(%)

FF/OG

ND/BD

DU

UR

CE

EI

W Washington ALTS Stand Stucture Distribution

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10Decade

Sh

are

of

Str

uct

ure

(%)

FF/OG

ND/BD

DU

UR

CE

EI

64

Modified ALTSModified ALTS

• Add a Add a constraintconstraint to force ALTS to to force ALTS to produce same produce same oldold forestforest acreage as acreage as DNR simulation in western DNR simulation in western Washington.Washington.

65

W Washington Old Forest Habitat(Modified ALTS)

0

100

200

300

400

1 2 3 4 5 6 7 8 9 10

Decade

Acr

es (

'000

)

DNR

ALTS

66


• NPV = NPV = $9.137$9.137 (billion) (billion) modifiedmodified ALTS vs. ALTS vs. original ALTS NPV of original ALTS NPV of $9.799$9.799 (billion). (billion).

• Proportion of W Washington landscape Proportion of W Washington landscape in in latelate seralseral structures increases to structures increases to 23%23% in 10th decade from original ALTS (and in 10th decade from original ALTS (and DNR) of DNR) of 18%18%. (. (NoteNote: Presently this is : Presently this is 4%4%.) .) [Late seral = ND/BD + FF/OG.][Late seral = ND/BD + FF/OG.]

67


• Modified ALTS Modified ALTS meetsmeets the the oldold forestforest condition but decadal condition but decadal netnet revenuesrevenues still still fluctuatefluctuate up and down. up and down.

• ALTS further ALTS further modifiedmodified to impose a to impose a NDFNDF constraintconstraint on decadal net revenue. on decadal net revenue.

• NPV = NPV = $8.977$8.977 (billion); harvest volume (billion); harvest volume flow “smoother” over time.flow “smoother” over time.

68

ALTS W Washington Net Revenue

0

500

1000

1500

2000

1 2 3 4 5 6 7 8 9 10

Decade

Ann

ual N

et

Rev

enue

(MM

$)

ORIG

MOD

69

W Washington Timber Sales(Modified ALTS)

0

500

1000

1500

1 2 3 4 5 6 7 8 9 10

Decade

An

nu

al S

ales

(M

MB

F)

DNR

ALTS

70

Modified DNRModified DNR

• Change objective to Change objective to volumevolume maximization.maximization.

• Maximize Maximize firstfirst decadedecade salesale volumevolume subject to subject to samesame constraints as constraints as before.before.

71

Modified DNRModified DNR

• ResultsResults: Harvest (sell) : Harvest (sell) 750750 MMBF/year in first decade and every MMBF/year in first decade and every decade thereafter.decade thereafter.

• IdenticalIdentical sustainable harvest as when sustainable harvest as when we maximize net present value.we maximize net present value.

• Examples of some Examples of some differencesdifferences..

72

DNR W Washington Net Revenue

0200400600800

1000

1 2 3 4 5 6 7 8 9 10

Decade

Ann

ual N

et

Rev

enue

(MM

$)

NPV

VOL

73

DNR W Washington Old Forest Habitat

0100200300400

1 2 3 4 5 6 7 8 9 10

Decade

Acr

es ('

000) NPV

VOL

74

Individual Planning UnitsIndividual Planning Units

• Each planning area was analyzed Each planning area was analyzed separatelyseparately using the two scenarios. using the two scenarios.

• Results for the Results for the NorthNorth PugetPuget Planning Planning Area shown.Area shown.

75

76

DNR North Puget

020000400006000080000

Age Class

Acre

s

OFF

RIP

UPLND

77

ALTS North Puget

020000

4000060000

80000

Age Class

Acre

s

OFF

RIP

UPLND

78

North Puget Timber Sales(DNR$1.9;ALTS$2.5)

0

100

200

300

400

1 2 3 4 5 6 7 8 9 10

Decade

An

nu

al S

ale

s (

MM

BF

)

DNR

ALTS

79

North Puget Net Revenue

0

100

200

300

400

500

1 2 3 4 5 6 7 8 9 10

Decade

An

nu

al R

ev

en

ue

(M

M$

)

DNR

ALTS

80

North Puget Inventory

02468

10

1 2 3 4 5 6 7 8 9 10

Decade

Inve

ntor

y (B

BF)

DNR

ALTS

81

North Puget Old Forest Habitat

0

50

100

150

1 2 3 4 5 6 7 8 9 10

Decade

Acre

s ('0

00)

DNR

ALTS

82

North Puget DNRStand Stucture Distribution

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10Decade

Sh

are

of

Str

uct

ure

(%)

FF/OG

ND/BD

DU

UR

CE

EI

North Puget ALTSStand Stucture Distribution

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10Decade

Sh

are

of

Str

uct

ure

(%)

FF/OG

ND/BD

DU

UR

CE

EI

83

Asset Values ($ Billion)DNR ALTS % Difference

W Washington 7.505 9.799 31% ACRESNorth Puget 1.945 2.487 28% 381,403South Puget 0.85 1.091 28% 141,815Columbia 1.581 1.976 25% 283,021Straits 0.715 1.034 45% 113,143OESF 0.781 1.379 77% 240,835South Coast 1.416 1.746 23% 265,877Six Unit Total 7.288 9.713 33% 1,426,094% Difference 3% 1%

84

Take Home PointsTake Home Points

• Combination of Combination of manymany factors influences factors influences determination of sustainable harvest determination of sustainable harvest volume:volume:– board of natural resourcesboard of natural resources interpretation of legal interpretation of legal

requirements when setting policies:requirements when setting policies:• numbernumber of independent of independent geographicalgeographical units for units for

which a harvest is calculated which a harvest is calculated

• individualindividual trust-specific management planning trust-specific management planning

• type of type of harvestharvest (sale) volume (sale) volume flowflow constraintconstraint used used

85

Take Home PointsTake Home Points

– exceeding exceeding minimumminimum regulationsregulations

– level of level of habitat conservationhabitat conservation and and biodiversitybiodiversity goals necessary to satisfy goals necessary to satisfy regulationsregulations

– pre-stratificationpre-stratification of land base into of land base into on/offon/off categories categories

– objectiveobjective used when calculating the used when calculating the sustainable harvestsustainable harvest

86

The End: Topics CoveredThe End: Topics Covered




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Effect of Input Assumptions on Potential Sustainable Harvest Levels B. Bruce Bare College of Forest...

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