Describes a method for assessing the competing demands of forest resources in a forest management plan by addressing economics values, economic impacts, and perceptions of fairness around each demand. Economic trends and forces that shape the dynamic ecosystem-economy relation are developed. The method is demonstrated through an illustrative analysis of a forest-management decision in the southern Appalachian Mountains. This report provides a technically sound, but readily understandable, method for assessing the full range of economic consequences that accompanies forest-management decisions. Also includes a 32-page report, "Role of Nonmarket Economic Values in Benefit-Cost Analysis of Public Forest Management."

Intensive forest management activities that maximize economic gains could negatively impact the long-term sustainability of ecological functions and associated ecosystem services. Understanding the trade-offs between economic gains and ecological losses is critical for sustainable management of forest resources. However, the effects of management alternatives on ecological functions and services have not been thoroughly investigated. The objective of this dissertation is to improve the understanding of trade-offs and synergies between economic gains and ecological functions in the boreal forest ecosystem. To achieve this goal, I first conducted a global review of economic and ecological trade-off analysis of forest ecosystems in chapter 2, demonstrated the principal analytical economic and ecological trade-off methods, and found that economic and ecological trade-offs remained poorly understood with limited ecological functions and ecosystem services following forest management alternatives in boreal forests. In chapter 3, in order to help decision makers select the economically optimal forest management alternatives, I examined the impact of forest management alternatives on economic gains, assessed as profit. I found that silvicultural intensity, forest composition, rotation age, and harvest method significantly affected profit. The results indicated that profit was higher when low silvicultural intensity (conifer - conifer) and Full-Tree to Roadside Tree-Length-to-Mill harvesting method (FT-TL) were applied with a rotation age of 100 years. Inspired by the conclusion of the global review, I chose two important ecological functions, plant diversity (habitat function) and carbon (C) stocks (regulation function), to evaluate their relationship with economic gains following forest management alternatives (managing rotation age and overstorey composition) in chapters 4 and 5, respectively. I found that forest management alternatives as major drivers determining profit, and plant diversity and C stocks. In the economic gain-plant diversity relationship study, I found hump-shaped trade-off relationships between profit and plant diversity following forest management alternatives, both for total species richness and richness of individual forest strata (shrub, understorey vascular and non-vascular species strata), except for a positive linear relationship between profit and overstorey diversity. Among the alternatives, I concluded that managing for mixedwood with approximately a rotation of 100 years is an optimal compromise between economic gain and plant diversity objectives. In the economic gain-C stock relationship study, I also found hump-shaped relationships between profit and C stocks of total ecosystem and individual pools (total live biomass, total deadwood, forest floor and mineral soil). When analyzed by overstorey composition, the relationships between profit and total deadwood C and mineral soil C were synergic across a wide range of profits in coniferous stands, while those were initially synergic and became trade-off with increasing profit in broadleaved and mixedwood stands. Among the alternatives, I further concluded that managing for coniferous stands with approximately a rotation of 100 years is an optimal management option that optimizes both economic gain and C stocks objectives. The results showed that the relationships between economic gains and ecological functions are predominantly non-linear in boreal forests. These results will help forest managers and decision-makers in defining optimum management options with limited or no ecological losses while satisfying economic gains.

The U.S. Forest Service has adopted the concept and language of ecosystem services to describe the beneficial outcomes of national forest management. We review the economic theory of ecosystem services as it applies to public lands management, and consider what it implies about the types of biophysical and other data that are needed for characterizing management outcomes as changes in ecosystem services. Our intent is to provide a guide to policymakers, managers, researchers, and others for evaluating and describing the tradeoffs involved in the management of public lands. Characterizing ecosystem services fundamentally is about explaining the benefits of national forests to the American public, with an emphasis on addressing their interests and concerns about how public lands are managed. Our hope is that this report will foster dialog about what people value about national forests and how public land management agencies might best go about securing those benefits