This dissertation examines the economics of continuous cover forestry. The analysis is based on an economic description of continuous cover forestry using empirically estimated growth functions, with both size-structured and individual tree models. The optimization problem is solved in its general dynamic form using gradient-based interior point methods. Sensitivity analyzes are conducted for both the ecological and economical parameters.
The thesis consists of a summary section and four separate studies, in which we solve economically optimal continuous cover forestry in single and mixed species stands. We present results for optimal harvests and stand structure, with and without biodiversity consideration, transition toward the optimal steady state, the effect of interest rate and harvesting cost on stand structure, density and optimal harvest timing, and how the optimal results compare to the limitations found in Finnish and Swedish forest legislation. It is found that harvests typically target the largest trees in the stand. In mixed species stands at more productive sites, species diversity increases with the interest rate, with an optimal steady state being a mixed species forest. Taking biodiversity into account in forest management increases species diversity. The harvest timing and intensity are dependent on both the interest rate and the fixed harvesting cost, and if the initial stand is far from the optimal steady state, the legal limitations are violated at least during the transition period.