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Timber supply and economic impact of mountain pine beetle salvage strategies

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Title: Timber supply and economic impact of mountain pine beetle salvage strategies
Author: Moreira-Munoz, Simon
Degree Master of Applied Science - MASc
Program Forestry
Copyright Date: 2008
Publicly Available in cIRcle 2008-04-15
Subject Keywords Mountain pine beetle; Timber supply British Columbia; Net present value; Salvage strategy; Economic impact; Lodgepole pine; LP Optimization; Decay level; Bioenergy
Abstract: To address the scale mountain pine beetle (MPB) outbreak in British Columbia, salvage has become fully integrated with timber supply strategies. The objective of this thesis is to assess the economic impact of different salvage strategies depending on different attack levels, decay rates, and stakeholder discount rates. The study area is located in N.E. British Columbia where the MPB has not yet reached its peak and where susceptible to attack stands account for 40% of the area. Salvage strategies were modelled with a timber supply model (Woodstock) which uses a linear programming type II optimization approach. Performance of the model was assessed over a range of indicators such as NPV, profit, salvage proportion, species composition, inventory levels, and non-recoverable volume. Sensitivity analyses were conducted on harvest flow, discount rate, and ending inventory. The model was very sensitive to the intensity of attack and less sensitive to the decay level. The high level of attack resulted in large volume losses, mostly as un-salvaged inventory. Although allowable annual cut (AAC) uplifts have an economic benefit, they do not necessarily maximize the salvage of pine. Non-pine species are an important component of the salvage and these species are also essential for the future timber supply. If the objective is to ensure quality and quantity of the future forest, policies have to complement AAC uplifts by strongly encouraging the salvage of mainly pine-leading stands and management options that minimize the “by-catch” of non-pine species and minimize destruction of advanced regeneration during salvage. However, this has an opportunity cost for the private industry where the objective is to maximize profit. If the salvage strategy focuses on decreasing the impact on cash flows, achieving desirable ending inventory levels, avoiding salvage of stands after shelf-life, and reducing impact on non-attack species, then the current harvest level will likely lead to a mid-term timber supply fall-down. Using the fibre for bioenergy production is an alternative if managing for bioenergy can be integrated into harvest operations. However, unlike mill residues, the bioenergy supply has to fully account for harvest and transportation costs of dead wood to the mill.
URI: http://hdl.handle.net/2429/697

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