How should we sustain future forests under extreme risk?

In this paper, we examine the implications of managing for sustained yield in a world characterized by growing risk and uncertainty. We review the history of sustained yield (SY) forestry in North America, with an emphasis on economic benefits and the persistence of the SY paradigm today, despite a publicized shift towards managing for a wider range of forest values called sustainable forest management (SFM). We show that current forest management goals around sustainability as well as SFM indicators are still predicated on maximizing harvest levels and timber flows. We build a simple model to explore the implications of SY under extreme (fat-tailed) risk assumptions to show that maximizing a level of harvest without adequately accounting for risk leads towards the depletion of the forest stock with a corresponding decline in the forest economy. We discuss these results in relation to real-world events such as the increase in catastrophic fires and pest outbreaks like the mountain pine beetle in Western Canada. We then examine the theoretical and practical implications that flow from this model and analysis.