Cost-effective measures for diffuse load abatement in forestry

This paper theoretically and empirically analyzes the design of cost-effective diffuse load abatement in forestry. Harvesting with related forest regeneration and drainage maintenance increases nutrient leaching, while riparian buffer strips and adjustments in drainage maintenance technology can be used to prevent this leaching. By utilizing a two-period model it is shown that cost-efficiency requires the establishment of a buffer strip system and a reduction in both current harvesting, and in drainage maintenance – if practised – relative to the private optimum to reflect their effects on water pollution. A simulation analysis was conducted to assess the magnitudes of the decision variables of the theoretical model, as well as to evaluate alternative technologies for the implementation and use of buffer strips and for the adjustment of drainage maintenance. The results for a representative forest holding in the southern half of Finland show that it is possible to considerably reduce total phosphorus leaching with minor cost.