Pricing the social contract in the British Columbian forest sector

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Abstract:

In this paper, we investigate the impact of various socioeconomic conditions on the value of timber tenures in the province of British Columbia. Two timber tenure models were created, one for short-term timber sale licenses and the other for longer term forest licenses. The short-term model revealed that timber sales that were awarded according to a combination of employment, revenue, and manufacturing criteria yielded $8.63/m3 less revenue than timber sales awarded based on revenue alone. Similarly, the long-term model indicates that manufacturing and employment conditions significantly reduce the bid on forest licenses. In both instances, we suggest that such conditions distort the use of timber, labour, and capital. Therefore, we conclude that recent forest policy changes in the province that removed several of these conditions greatly improved economic efficiency. Nevertheless, distribution impacts are likely to be important because resource rents have potentially been redistributed away from rural communities to the provincial government.

Dans cet article, nous évaluons l’impact de différentes conditions socio-économiques sur la valeur des tenures forestières dans la province de la Colombie-Britannique. Deux modèles de tenure forestière ont été créés, un pour les permis de coupe de bois (court terme) et un pour les permis d’exploitation forestière (long terme). Le modèle à court terme indique que les ventes de bois attribuées sur la base d’une combinaison de critères d’employabilité, de revenu et de transformation, ont généré 8,63 $/m3 de moins en revenus que les ventes de bois accordées seulement sur la base du revenu. De la même façon, le modèle à long terme indique que les conditions d’employabilité et de transformation diminuent significativement la demande pour les permis d’exploitation forestière. Dans les deux cas, nous croyons que de telles conditions nuisent à une utilisation rationnelle de la matière ligneuse, de la main-d’oeuvre et du capital. Ainsi, nous concluons que les récents changements apportés à la politique forestière de la province ont contribué à accroître l’efficacité économique en éliminant plusieurs de ces conditions. Toutefois, les impacts de la répartition sont possiblement importants puisque les bénéfices tirés de la ressource pourraient avoir été redistribués loin des communautés rurales au profit du gouvernement provincial.

Document Type: Research Article

Publication date: November 1, 2007

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  • Published since 1971, this monthly journal features articles, reviews, notes and commentaries on all aspects of forest science, including biometrics and mensuration, conservation, disturbance, ecology, economics, entomology, fire, genetics, management, operations, pathology, physiology, policy, remote sensing, social science, soil, silviculture, wildlife and wood science, contributed by internationally respected scientists. It also publishes special issues dedicated to a topic of current interest.
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