Tropical forest harvesting and taxation: a dynamic model of harvesting behavior under selective extraction systems

Abstract

A dynamic model of selective harvesting in multi-species, multi-age tropical forests is developed. Forests are predicted to exhibit different optimal harvesting profiles depending on the nature of their joint cost functions and own or cross-species stock effects. The model is applied to the controversy about incentives produced by various taxes. The impacts of specific taxes are shown to depend on the composition of the forest stocks, growth rates, and joint cost effects. Therefore, specific taxes may create different incentives and impacts in Indonesia than in Brazil or Malaysia, for example, suggesting that no single uniform forest tax policy will be appropriate for all countries or all forests.