Separate or mixed production of timber, livestock and biodiversity in the Caspian Forest

The temperate deciduous forest on the northern slopes of the Alborz Mountains has a high biological diversity and many endemic species. Huge areas are still old-growth forest but logging and grazing have degraded large parts of the forest. These degraded areas have low timber and forage yields and a species composition that differs from its natural state. In this study we present an analytical and a numerical solution to the forest management problem by optimizing the benefits of livestock production, timber harvest and biodiversity conservation. We focus on the ecological interactions rather than on administrative restrictions. Our findings are based both, on theoretical considerations and field investigations of ecological and economic parameters in Azerbaijan and Iran. The results of the numerical optimization suggest that it is optimal to separate timber and livestock production if biodiversity is not valued. Livestock rearing is preferable at high discount rates whereas timber production becomes more profitable at low discount rates. If the valuation of diversity exceeds a certain threshold a combination of timber production and livestock rearing is socially optimal since it yields a high biological diversity.