Selective logging in native forest: economic analysis

Abstract

The forest protection law, which was passed at the end of 2007 in Argentina, has brought about multiple discussion on economics incentives regarding to conservation on the part of private actors. One of the most passionate debate was given around the uses allowed by this regulation in the areas that were categorized under conservation degree II or yellow zone because it restrict the change in the use of the land. It is possible to quantify the land expected value (LEV) assigned to a sustainable manage of the forest with selective logging applying the formula of Fautsmann. This method makes possible to evaluate the optimal logging that maximizes the returns to the land based on the flow of commercialization of wood collected from the forest. Also, it lets to measure the willingness to pay agents for the land covered by forest mass whose productive use is the selective logging of native species from a sustainable manage. There are alternatives in the use of the land that offers better profits margins and added to this there are expectations about changes on the classification of the sites that leads us to propose the working hypothesis. It consist on, the market value or “commercial value” of the sites classified as conservation degree II is higher than the maximum discounted net value that would be obtained through the forestry use of native forest under a sustainable system of selective cutting. From the analysis proposed, we seek to test the hypothesis put forward, trying to understand how the incentives of the agents in relation to forest conservation are operating.