12. Multiple Forest Stocks and Harvesting Decisions: The Enhanced Green Golden Rule

The concept of the Green Golden Rule (GGR), introduced by Chichilnisky et al. (1995), which refers to the configurations of the economy that give the highest indefinitely maintainable level of instantaneous utility, is extended to forest resources. Generally, a forest has multiple types of stocks/cohorts—stocks of different ecological attributes and age classes—that provide different goods and services, and these goods and services are valued differently by different user groups. Hence, the aggregation of all stocks into a single stock is unable to capture the complexities of forest growth, user groups’ preferences, and their implications for sustainable management of these resources. Sustainable management of forest resources requires optimal consumption as well as an optimal level of conservation of each type of stock separately. We develop optimal conditions for conservation and consumption for a forest comprised of three differentiable stocks, and generalizes these conditions for any number of stocks greater than three. We term these conditions as the Enhanced Green Golden Rule (EGGR). The EGGR provides more distinct optimality conditions than the GGR for all stocks except the terminal stock. We demonstrate the applications and implications of the EGGR for logistic growth functions of three types of forest stock having a Cobb-Douglas utility function of forest consumption and conservation.