N.: Spatial and temporal specialization in forest ecosystem management under sole ownership

"Ecosystem management " complicates forest management considerably. In this paper we extend the economic analysis of forestry to capture both the temporal and the spatial dimensions, allowing optimization of timber harvest decisions throughout ~n ecosystem. Dynamic programming simulations illustrate the implications for the simplest ecosystem, consisting of two forest management units. Results indicate that explicit recognition of ecological interactions, even between identical forest stands, may prescribe specialization through time and across space. Such spatial and temporal specialization leverages opportunities to provide ecosystem goods that may be foregone through reliance on "rules of thumb " derived from models that focus on the single stand. Key words: ecological economics, forest management, Hartman, ecosystem management economics. Present-day ecosystem management represents a structural shift in the philosophy of resource management. Public forest management and policy objectives have developed from initial interest in commercial products to broad man-dates for multiple-use, multiresource manage-ment (Behan), as managers balance the con-sumptive needs of society with a desire to maintain biological diversity and functions of ecosystems (Swallow). Ecosystem management complicates policy decisions considerably. Ex-isting economic models of forest management are inadequate because they fail to account for the spatial relationships that determine many ecosystem functions. The traditional forest management approach is primarily based on the stand-level harvest models of Faustmann as ex