Policy Implications

To the extent that weather damage risk is endogenous, private and public forest managers may be able to improve ecological and economic returns by allowing for the effects of their decisions on risk. However, this does not tell us whether any particular strategy should be adopted in the case of any specific stand. Options to be adopted depend on managers’ objectives and the cost of the option relative to the reduction in risk provided. Many key factors interact in a very complex manner to influence weather risk, making it vital to consider case-specific conditions in making decisions regarding mitigation of weather risk. It is important to consider joint risk of different types of weather events, which may reinforce or contradict each other.

Policy implications are expected to vary among forest industry, NIPF landowners, and public forest managers because these groups have different objectives. Forest industry managers are expected to be profit maximizing, whereas NIPF landowners likely have more varied objectives and value nontimber amenities of standing forests more highly. Damage mitigation options that would be optimal for forest industry may be less suitable for NIPF lands or vice versa, depending on the joint effects of the strategies on damage risk, expected present value, and stand amenity values. Similarly, public land managers are expected to take various nontimber objectives into account. The presence of endogenous storm risk may be an opportunity for the public sector to provide incentives for private landowners to take actions to mitigate storm damage, especially where private inaction could result in secondary insect and disease infestations or other conditions that could have negative effects on neighboring properties.