RESTORING SUSTAINABLE FORESTS ON APPALACHIAN MINED LANDS FOR WOOD PRODUCTS, RENEWABLE ENERGY, CARBON SEQUESTRATION, AND OTHER ECOSYSTEM SERVICES Page: 21 of 28
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r(L )= Ja[Lo(z)izdz; $(L)= Jb[Lo(z)]e izdz (2)
0 0 0
where i is the interest rate, a(.) are annual revenues generated from the land (perhaps grazing or
hunting leases), b(.) are non-market benefits derived from owning land each period, z is a
variable of integration representing time periods 1,...t, and Lo(z) is land condition at each point
Suppose now the landowner represented by (1) is offered the opportunity to reforest
previously mined land that was reclaimed into grass cover. Not only will the reforestation
provide potential harvest revenues when the timber matures, but the stream of non-market
benefits may also be different than those identified in (2) above. Thus, the new indirect utility
function can be written:
V(r,I,L) =V[r(Lf),JI]+$(Lf) (3)
where Lf is the condition of the land after reforestation, and discounted revenues and non-market
benefits are calculated as follows:
pQ (tet - c eit
r(L ) -c + Ja[Lf(z)]eizdz (4)
(1-e t) 0 o
#(Lf)= Jb[Lf(z)]e izdz (5)
where p is the unit price of timber, Qfis the volume of timber produced from reforested land at
age t, cjis regular reforestation costs after timber harvest, and co is initial reforestation costs
incurred when converting grassland into forest2.
Reforestation of the reclaimed land involves a welfare improvement only if:
V(r,I,L )>V (r,I,L0)
V[r(L ), I] - V[r(L0 ), I]+ $(L ) - $(L ) > o
2 Note that this representation of the problem is slightly simplified for presentation, depicting reforestation cost as a
single, one-time expense. In actuality, there may be multiple costs associated with site conversion (especially the
control of established, competing vegetation) that occur over the first few years of initial forest stand establishment,
which we address in our empirical analysis.
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Burger, James A.; Galbraith, J.; Fox, T.; Amacher, G.; Sullivan, J. & Zipper, C. RESTORING SUSTAINABLE FORESTS ON APPALACHIAN MINED LANDS FOR WOOD PRODUCTS, RENEWABLE ENERGY, CARBON SEQUESTRATION, AND OTHER ECOSYSTEM SERVICES, report, November 29, 2004; United States. (https://digital.library.unt.edu/ark:/67531/metadc780576/m1/21/: accessed April 23, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.