Economic incentives for sustainable management: a small optimal control model for tropical forestry

The main purpose of this article is to evaluate different policy options fo r promoting low-impact logging through the use of economic incentives. To d o this we construct a small optimal control theory model within an integrat ed framework including both the biological and the economic implications of timber extraction. The approach uses detailed stock, yield and cost data f rom Ghana. A numerical solution is reached by the use of multi-period non-l inear optimisation. Direct subsidies to low-impact logging activities throu gh area-dependent subsidies is found to be far more efficient than subsidis ing prices of tropical timber. The model takes a novel approach in combinin g growth and stock in a tropical forest area with the cost and damage conne cted with timber extraction. II allows us to analyse the interactions betwe en stock, growth, timber extraction, logging damage and operating costs in an integrated manner. (C) 1999 Elsevier Science B.V. All rights reserved.