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“In the forest” – that’s how the Japanese artist Yayoi Kusama entitled one of her paintings from the early stage of her career. Already in this painting, the artist’s compulsion on forming large networks of smaller units and entities is visible.

A forest, as an ecosystem, can indeed be seen as a complex network of small units and links in between them. That view probably corresponds fairly well the way forests are defined in ecology.

Unfortunately, the real world does not match our idealistic, optimal-solution world, because…

How about economics, how do we economists see forests?

Following our compulsion, we add to the complexity of the picture and link people and society into the ecological network to form even a bigger network.

Luckily, however, our theoretical toolbox is particularly apt to simplify complexities into sometimes minimalistic rules. We do this by focusing on the very essentials, to answer questions such as how to divide forests between competing end uses so as to bring as much wellbeing to the society as possible. For the correct answer, we need to value forests in different end uses and find a solution where the marginal values coincide.

However, the real world could be modified to be closer to the optimal one by adopting clever policies, integrating…

How about multiple-use forestry?

But how about multiple-use forestry, the case, where the same forest is used for more than one purpose, such as timber and carbon? Not surprisingly, the same marginalistic principle still applies.

Unfortunately, the real world does not match our idealistic, optimal-solution world, primarily in this case, because the value of carbon is missing in the decision-making environment of not only the landowners but also of the users of wood products. However, the real world could be modified to be closer to the optimal one by adopting clever policies, integrating the value of carbon into the decision-making of relevant market participants.

The inconvenient truth is that, as long as we don’t use clever policies, we have to settle with less-than-clever policies set by, e.g. the EU, such as the reference-levels for forest carbon sinks, or demands for sustainability criteria for forest-based energy.

So, rather than merely fighting against awkward initiatives, let’s form a pro-active network within EU for a good purpose of moving toward wise policies with sound theoretical premises.

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