Evaluating the profitability of selection cuts in irregular boreal forests: An approach based on Monte Carlo simulations

Abstract

This study compares the financial return of converting old-growth boreal stands into even-aged stands to that of two approaches of selection cutting in Quebec (Canada). In this region, old-growth stands are usually harvested by completely removing the canopy while protecting the abundant advance regeneration, an approach known as careful logging around advance growth (CLAAG). These approaches were compared using a time frame of over 200 years. Consideration is given to the majority of the operating costs leading to end products. The financial analysis integrates Monte Carlo simulations, making it possible to consider the uncertainty associated with variables. The net present values (NPVs) are then associated with a distribution of probabilities. The results show that the probabilities of obtaining positive NPVs are high for all treatments, suggesting that selection cutting approaches can be appropriate alternatives to CLAAG for some stands. Depending on the criteria used, the CLAAG cut or one of the selection cuts show the best performances. In fact, the results of the financial study show that in the future, selection cutting approaches will be more profitable than CLAAG but still less than present CLAAG operations. This occurs because, according to the current yield curves and rotation ages, future stands managed with CLAAG will have smaller and less valuable trees than in the primary forest and in stands managed with the selection system. © 2012 Institute of Chartered Foresters. All rights reserved.