The Economics of Salvage Harvesting and Reforestation in British Columbia's Mountain Pine Beetle-affected Forests

British Columbia's mountain pine beetle salvage and reforestation decisions involve a wide range of complex social, economic, and ecological trade-offs. In this report, we summarize the current treatment options in beetle-affected areas and outline the many costs, benefits, and risks associated with managing beetle-killed stands. We then demonstrate some important economic aspects of this issue by comparing the discounted costs and benefits of treatment choices under different sets of post-outbreak assumptions. The economic case for salvage harvesting is clear where the activity is profitable, and where post-salvage stand regeneration outperforms stand regeneration in the absence of salvage. However, low-value stands with a positive outlook for natural or advance regeneration may generate greater stand value when left unsalvaged. Where salvage harvesting is not financially feasible, rehabilitation appears to be profitable only on sites with high productivity, low treatment costs, and a poor outlook for natural regeneration. Given the range of site productivities typical in the BC Interior and typical reforestation costs, few sites meet these criteria. However, forest-level timber supply impacts and non-timber benefits must also be considered, which may justify rehabilitation on a wider range of sites. Partial cutting may be another treatment option in some stands with significant volumes that are unaffected by mountain pine beetle. The discounted future returns from the residual overstorey (including non-timber benefits) largely determine whether this harvesting system is preferable to immediate clearcutting. Candidate sites for partial cutting typically have adequate salvage volumes to pay for any costs associated with the initial stand entry, such as road construction. Where the pine component of the stand offers little short-term profit, it may be more profitable to defer harvesting altogether, allowing beetle-killed trees to decay on the stump.