Payment for multiple forest benefits alters the effect of tree disease on optimal forest rotation length

Forests deliver multiple benefits both to their owners and to wider society. However, a wave of forest diseases and pests is threatening this worldwide. In this paper we examine the optimal rotation length of a single-aged, single rotation forest when a payment for non-timber benefits is included. This payment reflects the social values of forest management and is offered to private forest owners to partly internalise such benefits. We show that the inclusion of such a payment generally increases optimal rotation length, but this effect shows a range of complex interactions with key factors linked to tree disease (its external pressure, rate of transmission and impact on the value of harvested timber). Moreover, we highlight that this result is dependent on the structure of the payment for non-timber benefits, and under some constraints it may be optimal to never harvest the forest.