Optimising profits from timber harvest and the biodiversity conservation value in a central European beech forest using a novel bioeconomic forestry model

• We present a novel bioeconomic forestry model for continuous-cover forests. • The model is parametrized for European beech forests but easily extendable to mixed-species forests. • We find realistic optimal management strategies that maximise net revenues from timber harvesting. • We find approximately linear trade-offs between the economic and the biodiversity conservation value of the forest. • Compensation programs currently implemented in Germany cover considerably higher costs for the retention of 10 habitat trees per hectare than we observe. How can we meet economic objectives of timber harvesting while maintaining the functioning of diverse forest ecosystems? Existing forest models that address this type of question are often complex, data-intensive, challenging to couple with economic optimisation models, or can not easily be generalised for uneven-aged mixed-species forests. Here, we develop an ecological-economic optimisation model that combines ecological realism with mathematical tractability and, thus, the ability to be optimised numerically. This approach makes one of the best and most widely tested inventory-calibrated forest simulation models available for rapid economic analyses. As a proof-of-concept, we apply the model to a beech-dominated forest in the Hainich-Dün region in Thuringia, Germany. The ecological module is the Perfect Plasticity Approximation (PPA) demographic forest model that simulates forest dynamics based on individual tree growth and survival rates in the canopy and understory layers, respectively, as well as recruitment rates. We used repeated forest inventory data from a 28-ha forest plot to quantify these demographic rates and validated the predictions of the ecological module against the structure of old-growth beech forests in Europe. The economic module includes the optimization of the present value of net revenues (market revenues net of harvesting cost) from harvesting timber. We use Pareto fronts to quantify the trade-off between the economic and the biodiversity conservation value of the forest. As an indicator of the biodiversity conservation value of the forest, we use the number of retained potential habitat trees (>70 cm diameter). The forest model delivered reasonable predictions of structural attributes of unmanaged old-growth beech forests. When net revenues from timber harvesting were maximised, trees were logged when they reached 60 cm (no discounting) or 40 cm (discounting with 1.5 % interest rate) in diameter. This is similar to current management practices in beech forests. We found an approximately linear trade-off between steady-state timber net revenues and the number of retained habitat trees and that compensation programs currently implemented in Germany cover considerably higher costs for the retention of 10 habitat trees per hectare (240 Euros/ha/y) than we observe (no discounting: 109 Euros/ha/y; discounting: 89 Euros/ha/y in lost steady-state net revenues). We established a generic ecological-economic modelling framework that reliably represents forest dynamics and identifies optimal harvesting regimes over the full set of feasible strategies. The framework can easily be extended to different forest types, to mixed-species forests, and to the optimisation of multiple ecosystem services.