This paper has three main objectives: (i) to investigate whether the four-quadrant approach introduced by J.S. Maini reveals a useful typology for grouping countries by gross domestic product (GDP) and forest cover per capita, (ii) to determine if the framework can enhance our understanding of the relationship between forest cover and GDP per capita, and (iii) to investigate why countries in the four-quadrant world occupy different quadrants and to determine the principal factors affecting country movement across and within the individual quadrants. The examination reveals that countries can be classified into four broad categories and that GDP and forest cover per capita have a low but consistent level of negative association. After regressing economic, institutional, social capital, and other variables on a country's occupancy and movement in the four-quadrant world, the results suggest that countries in each quadrant share different characteristics and that factors underlying country movement vary according to the quadrant being observed. Overall, countries with less corruption and higher education are likely to experience increases in both forest cover and GDP per capita, while countries exporting a significant proportion of forest products have a reduced probability of increasing both variables.

Amidst surging interest in the policy implications of a hypothetical environmental Kuznets curve, a claim has emerged recently arguing that China has entered a later stage of a U-shaped forest resource curve. Using published data for the past two decades, we show that there is a lack of empirical evidence supporting that claim. At the level of provinces in China, forest cover and per capita GDP appear to have a nonlinear, positive relationship, but regression results do not lend support to the existence of a nicely-behaved U-shaped curve. The findings suggest that policy makers need to be cautious about the statement that a particular jurisdiction is in an advanced stage of forest resources management.

Prevailing societal values have enthroned sustainable forest management (SFM) as a new paradigm governing forest practices. Calling for respecting a range of dynamic conditions instead of a single, static target, SFM differs from conventional forest management on account of its acceptance of plurality in management objectives, approaches and decision making processes. Forest economics has evolved accordingly, in response to the need for accommodating pluralism. This paper examines several issues of pluralism in the economics of SFM, principally: (i) multiple forest uses under extended forest rotations, (ii) the panarchy framework, and (iii) the stakeholder's approach. The merits and limitations of these approaches are discussed. The paper ends with some suggestions for future research.

Economic theory has played only a minor role in developing British Columbia’s forest strategy for managing the mountain pine beetle (Dendroctonus ponderosae Hopk. [Coleoptera: Scolytidae]). Forest economics literature addresses the forest management problem caused by the beetle in lodgepole pine (Pinus contorta Dougl. ex Loud. var. latifolia Engelm.) from a number of perspectives. The standard methods are concerned with maximizing the value of harvesting a single forest site under the risk of bark beetle. The second viewpoint extends this value-maximizing approach to incorporate multiple uses of, and benefits from, a larger forest system. In this second approach, management policy suggests systems that reduce risk and reduce impact, rather than increase physical product. This chapter discusses literature from these two viewpoints and identifies issues, opportunities and concerns of applying forest economic theory to the mountain pine beetle problem in British Columbia.

Using a data set on secondary wood manufacturers in British Columbia, collected in 2000, the important factors in e-technology adoption are examined using a binomial logit model. The three main aspects of e-technology adoption by these firms are examined, including having a website, making purchases, and selling products over the Internet. The results of the analysis indicate that the most important factor in these three aspects of e-technology adoption is the reliance on export markets. Considering that the export market is where the majority of recent growth in this sector has occur-red (Stennes et al. 2005) this may help explain the high level of adoption for secondary wood manufacturers in British Columbia compared to other jurisdictions and compared to the forest products sector as a whole.

British Columbia is in the midst of the largest outbreak of the mountain pine beetle (Dendroctonus ponderosae Hopk. [Coleoptera: Scolytidae]) ever recorded in western Canada. Mature lodgepole pine (Pinus contorta Dougl. ex Loud. var. latifolia) trees form the bulk of the trees under attack. The mountain pine beetle carries several specific blue stain fungi that decrease wood moisture content and weaken tree defense mechanisms, eventually leading to tree death. Blue stain develops quickly in the sapwood of dying trees. It appears in products made from stained logs, affecting what products can be made and profitably sold. Infested trees also dry and develop splits and checks as the drying stresses are relieved. The physical condition of the wood affects how it can be processed. This chapter discusses current knowledge of the properties of post-mountain pine beetle wood, its use and marketing. It draws upon information from the literature and current research in Canada that pertains to properties of blue stained and dead wood. Implications for use of post-mountain pine beetle wood for various products are discussed, significant data gaps are identified, and recommendations are made for research to bridge these gaps.

This chapter reviews the ecology of lodgepole pine (Pinus contorta Dougl. ex Loud. var. latifolia Engelm.) in relation to interactions with fire and the mountain pine beetle (Dendroctonus ponderosae Hopk. [Coleoptera: Scolytidae]), with special reference to western Canada. Lodgepole pine has wide ecological amplitude. In western Canada, lodgepole pine is present in the majority of biogeographic zones in its distributional range and has four successional roles ranging from minor seral to climax. Although lodgepole pine can regenerate without fire disturbance, it is principally a fire-maintained species. The mean fire return period and mean fire size are the major determinants of age distribution of lodgepole pine types on the landscape, and hence the spatial and temporal extent of susceptible forests. Epidemics may heavily deplete the large diameter pine components of stands, thereby increasing the non-host overstory component of mixed stands. The surviving host and non-host trees will generally increase in growth. Post-epidemic development of forest types depends on a large number of factors such as fire disturbance, extent of stand depletion, advance regeneration, presence of non-host overstory trees, and biogeographic zone, and may range from pure stands of lodgepole pine to pure stands of non-host species.

The impact of different trade restrictions on Canadian softwood lumber exports to the United States are examined using a spatial equilibrium trade model of the North American (NA) lumber market. Scenarios designed to result in equivalent US domestic market impacts including ad valorem tariffs quotas and a unit tax increase on Canadian timber inputs are simulated. The 27.2% tariff and the quota have the same overall welfare impacts in the two markets with US producers gaining and US consumers losing for an overall market loss of approximately $520 million in the US. Ignoring quota rents, Canadian producers lose and consumers gain as prices fall in Canada for an overall loss of $880 million. Tariff revenues or quota rents, at over $1 billion per year, mean that tariffs (collected by the US) clearly yield a benefit for the US over Free Trade and quotas (rents accruing to Canadian producers) an overall benefit for Canada. If US producer protection is gained through increased Canadian unit timber fees, it has markedly different consequences. Markets that import NA lumber face higher prices in this situation and domestic Canadian prices rise as much as those in the US as the price wedge present in the other scenarios disappears.

THE WAYS IN WHICH FORESTS ARE PERCEIVED AND USED HAVE CHANGED DRAMATICALLY OVER RECENT YEARS. FORESTS ARE NO LONGER SEEN SIMPLY AS A SOURCE OF TIMBER, BUT AS COMPLEX ECOSYSTEMS WHICH SUSTAIN LIVELIHOODS AND PROVIDE A RANGE OF PRODUCTS AND ENVIRONMENTAL SERVICES. IT IS NOW WIDELY RECOGNISED THAT FORESTS CAN CONTRIBUTE TO RURAL DEVELOPMENT AND POVERTY ALLEVIATION.

The present book gives cause for some reflection on the changing paradigms that have become apparent in the field of forestry over the past two decades. The new social values and perceptions have been integrated into a holistic approach for the study of forest related issues, from an intersectoral and wider angle including social, economic, end environmental factors.

With the start of economic reforms in 1978, China's forest sector was caught up in a whirlwind of change. It began with the devolution of forest tenures in rural areas, but led to reform of state-owned forest enterprises via introduction of stumpage fees and liberalized forest product prices. From the early 1990s to 1998, while China increasingly embraced the market economy, the nation's natural forests continued to be depleted despite repeated emphasis on sustainable development. Then, in the wake of the 1998 floods in the Yangtze River basin, there was a shift in focus from timber production to environmental protection, with policy redirected toward the rehabilitation of damaged forest ecosystems, afforestation in desertified and degraded areas, and a ban on logging in natural forests. We provide an overview of the central themes of reform in China's forestry sector, identify the major factors that influenced policy formulation, and show that the outcomes of China's forest policy changes in the aggregate represent a paradigm shift.

The abundant inventory of mature timber in Canadian forests is a mixed blessing. Mixed, because it attracts premium prices due to relatively outstanding performance characteristics (albeit increasingly mitigated by processing technologies) and low development costs, but the mature age class makes these stands vulnerable to a variety of forest health threats. Securing the wealth in publicly owned forests requires investment in effective monitoring and delivery in controlling a host of forest pests. This paper discusses emergence of the mountain pine beetle to epidemic proportions in British Columbia, outlining the major factors contributing to this epidemic and the federal government's efforts to assist British Columbia in responding to the epidemic.

This paper has three objectives. First, we describe the current patterns and characteristics of forest products trade in the Pacific Rim, and highlight recent trends in the directions of trade in the region. Second, focusing on Canada and the United States, we outline an interdependency relationship between the two countries in the context of forest products trade flows in the Pacific Rim. Third, we analyze several major factors that influence the relative positions of Canada and the US in the dynamics of Pacific Rim forest products trade. The paper ends with a discussion on the prospects for forest products trade in the Pacific Rim, with a particular reference to the opportunities and challenges facing Canada and the US.

This paper examines factors determining the payment schemes for silvicultural workers when activities are performed in-house rather than contracted out. The payment schemes examined include piece rates, hourly wages and salaries (monthly or bi-weekly). The research is based on data from a 1997 survey of British Columbia forest companies. Results of our analysis indicate that firms choose silvicultural payment schemes to synchronize the attributes of activities with the firms’ characteristics for the purpose of economizing on transaction costs. Generally, larger companies rely more on wages, and especially salaries, than do smaller companies. The latter are more likely to opt for piece-rate payment schemes. The more workers that a company hires directly, the more likely that a piece-rate system is adopted. However, as the length of silvicultural season increases, the greater the chance that the forest companies rely on salaries.

In pursuit of sustainable forestry, British Columbia, Canada, has undertaken a number of policy initiatives in recent years. First, the participation of stakeholder groups was formally institutionalized through round-table and public debate processes that serve as the foundation for spatial planning of forestland and as an input to forest policy development. Second, areas of conflict over forest resources utilization were identified, and a variety of policies were implemented in pursuit of resolution. These policies included land-use zoning, protected-area expansion, forest management prescription and timber supply analyses. Third, the legislative framework was consolidated with an orientation towards sustainable forest practices and enhanced accountability. The transition from a timber-harvesting dominant model to one of sustainable forestry presents the challenge of managing forest resources for increasingly diversified uses under a growing number of operational constraints. British Columbia is moving to a multiple-use strategy at the forest landscape level with dominant use zonation in an effort to minimize forestland dedicated to timber production. The experience indicates the importance of considering the effects of the trade-offs in forest resource sustainability.

SUMMARY Expanding the value-added (secondary) processing sector of the forest industry is critical if forestry is to continue as a key economic driver in the province of British Columbia, Canada. Past performance of this sector, and expectations for future growth, are examined focusing on developments in the important US market.