Essays on the bioeconomic control of invasive species and forest pests

Like many natural resource and environmental issues, controlling pest species requires both economic and ecological considerations. Economic considerations revolve around comparing costs and benefits in an attempt to determine optimal economic activity. Especially critical in natural resource and environmental applications is recognizing the role of uncertainty as well as interconnections within economic markets. Ecological considerations provide a more robust account of the direct and indirect impact of economic activity on the natural world. An integrated approach to pest species management recognizes that the economic system influences and responds to ecosystems and vice-versa. The integration of these two disciplines creates a bioeconomic system, often uncovering critical feedback loops which better inform policy. The purpose of this research is to employ integrated bioeconomic models to investigate economic policies aimed at controlling invasive species and destructive forest pests. Specifically, three essays are developed which focus on various policy issues that arise when integrated bioeconomic models are used to craft policies of invasive species and forest pest management.;The first essay develops an optimal stopping/optimal control framework to address the control of a biological invader. In this framework, control of the invader is treated as an uncertain and irreversible investment in which timing and degree of investment are simultaneously considered. Invasive species range is assumed to evolve according to a geometric Brownian motion process. Using a real options framework, an analytical solution for the optimal stopping threshold is provided. This threshold is then employed as a constraint in a minimization problem which determines the optimal rate of invasive species spread which minimizes damages and control costs. The result is an invasive species policy which is optimized over both time and degree of control.;The second essay extends the optimal stopping/optimal control framework developed in essay one by allowing for barriers which may limit future spread of the invasive species. In this way, essay two recognizes that optimal invasive species policies require the consideration of spatial factors which are not readily incorporated into traditional optimal stopping models. Results indicate that inclusion of an upper absorbing barrier on invasive species spread may dramatically alter invasive species policy under certain circumstances. The framework developed in this essay is applied to the current invasion of emerald ash borer in the United States. Results illustrate the presence of a spatial-dynamic externality which leads to invasive species control decisions that may be suboptimal from a social perspective.;The third essay develops a bioeconomic timber harvesting model to analyze how harvesting decisions made at localized and centralized levels influence mountain pine beetle populations and dynamics. Because mountain pine beetle and pine forests interact according to a predator-prey relationship, the risk of forest damage arising from mountain pine beetle mortality is endogenous in nature. Essentially, timber harvesting creates a positive production externality which limits mountain pine beetle populations and dampens natural cycles of the pest. However, dispersal of mountain pine beetle forces localized managers to treat mountain pine beetle risk as exogenous. As a result, localized managers ignore the positive production externality, resulting in a suboptimal harvest of live trees. A central manager, who considers the forest across its entire range, will optimally incorporate this positive production externality, resulting in increased levels of timber harvesting, subsequently reducing mountain pine beetle mortality. A dynamic harvest subsidy is developed which allows localized forest managers to fully incorporate this production externality and achieve welfare maximizing harvest levels.