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The Effect of Conservation Value on the Optimal Forest Rotation

The conservation value of a forest can be high, but is usually omitted in determining the optimal forest rotation. A function representing conservation value can be based on an estimated above-ground, bio-mass function of the dominant tree. An economic model is used to estimate the break-even conservation value required for the preservation of Mountain Ash forests of the Thompson Dam catchment in Australia. The results suggest that timber harvesting in these forests should cease if society values the annual flow of non-market goods and services from these forests at or above $104,398.58 (in year 2000 Australian dollars). (JEL Q23, Q25)