Impact of storm risk on Faustmann rotation

Abstract

Global warming may induce in Western Europe an increase in storms. Hence the forest managers will have to take into account the risk increase. We study the impact of storm risk at the stand level. From the analytical expressions of the Faustmann criterion and the Expected Long-Run Average Yield, we deduce in presence of storm risk the influence of criteria and of discount rate in terms of optimal thinnings and cutting age. We discuss the validity of using a risk adjusted discount rate (a rate of storm risk added to the discount rate) without risk to mimic the storm risk case in terms of optimal thinnings.