The economics of deriving raw materials from forests is examined. Competitive markets are consistent with the notion of efficiency, although they may not produce results that are fair. Sustainability as an alternative criterion suffers from problems of commensurability and an inability to identify preferred options when a choice between alternative patterns of use is possible. Given a choice among a number of sustainable use rates, competitive markets satisfy both criteria. Institutional arrangements are significant variables in forestry policy because they provide a basis for competitive markets and they determine the distribution of benefits and costs associated with use. (no keywords)
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