for forest products, at least over the near term, as a result of decreased federal harvests (Haynes et al. 1995), which can be expected to affect investments and harvests in nonfederal forests (Adams et al. 1996) to the extent that price increases were not anticipated by landowners.

Forestland investments can be conceptualized either as establishing new forests with primary inputs of land, labor, or capital or as retaining existing forests with growing stock (Wear 1993). Some forestland investments require advance monetary outlays; others involve only opportunity costs. Some investments are made in the expectation of earning income or profit, whereas with others the expectation of return is nonmonetary. Specifically, investments in forestland can include the following:

  • Keeping the forest intact, rather than allocating it to an alternative land use, such as agriculture or residential development.
  • Allowing the trees with a potential market value to continue to grow and possibly increase in value.
  • Protecting the forest against losses from wildfire, pests, pathogens, or vandalism.
  • Developing and maintaining access, such as roads, landings, or trails.
  • Management planning, such as timber harvest or estate planning.
  • Pursuing management activities associated with particular objectives, such as tree planting, timber-stand improvement, or wildlife habitat enhancement.
  • Subsidizing the forest in the form of cost-share programs, tax incentives, or technical-assistance programs.

Investment Environments

Investment Climate

The magnitude of goods and services provided by nonfederal forests and the protections afforded them depends on the willingness and ability of the American public to invest in them. This willingness and ability is tempered by broad economic swings in the nation and by the attractiveness of potential investments to the public and private investors. With the national political mood favoring reduction in government at all levels, the climate for government investment is not particularly positive. In recent years, the federal government has reduced investments in real and nominal terms in natural and environmental programs generally. With the devolution of federal action, the private sector and state and local governments should pick up a major share of future investments in nonfederal forests. Whether these investments are possible is yet to be ascertained. Obviously, the federal government has a role in creating a positive national economy in which investments in nonfederal forests will occur.

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