Modelling Forest Growth and Finance: Often Disregarded Tools in Tropical Land Management

Abstract

While many studies analyse patterns of tropical land management with a backward-oriented approach that utilises data of the past, we propose to consider future-oriented modelling approaches to find sustainable land-use options. This proposal is illustrated with application examples for advanced growth modelling in tropical forests, a short overview on financial performance analyses for tropical land uses, and the introduction of a new modelling approach. This modelling approach sees tropical land management as a financial portfolio of land-use options. Its advantage is the ability to make transparent effects of financial risk reduction that arise from mixing forestry and agriculture-based land-use options. The approach thus does not analyse land uses as stand-alone options, like most other analyses do. The land-use portfolio modelling shows that sustainable land use may also be financially attractive for farmers, if abandoned farm lands are reforested (with a native tree species in our case) and sustainable management in natural forests is carried out. We conclude that the combination of advanced growth with sound financial modelling may lead to improved bioeconomic models. Developed bioeconomic models are necessary to increase the biological realism and acceptability of the results obtained.