Forest rotation and streamflow benefits

Summary

This paper analyses the optimal rotation of a forest when the forest provides streamflow benefits. While timber values are typically assumed concave in stand age, streamflow benefits may be quasiconvex, with maximum current benefit flows being realised when the forest is either very young or very old. These features can explain the divergent views held by forestry and water management specialists concerned with managing the Thomson River Catchment area in Gippsland, Victoria. Optimal management may call for extremes of either short or very long forest rotations. It is in the mid-range of forest ages that streamflow benefits are mainly lost. Using realistic data a case is made for never harvesting the Thomson Catchment forest.