Estimating price compensation requirements for eco-certified forestry

Eco-certified forestry (ECF) is defined as forest management that incorpora tes ecological concerns into commercial timber production. In this paper, w e link the adoption of ECF practices to shifts in the timber supply functio n. We use a spatially disaggregated model of southeastern US timber supply to simulate the empirical relationship between variations in the price prem ium offered for timber produced under ECF regimes and producer surplus-maxi mizing rates of ECF. The simulation results suggest that a large share of n onindustrial private timber suppliers in the region may have relatively sma ll compensation requirements, but complete adoption by the sector would req uire a large premium. (C) 2001 Elsevier Science Ireland Ltd. All rights res erved.