Integrating risk management tools for regional forest planning: an interactive multiobjective value-at-risk approach

In this paper, we present an approach employing multiobjective optimization to support decision making in forest management planning under risk. The primary objectives are biodiversity and timber cash flow, evaluated from two perspectives: the expected value and the value-at-risk (VaR). In addition, the risk level for both the timber cash flow and biodiversity values are included as objectives. With our approach, we highlight the trade-off between the expected value and the VaR, as well as between the VaRs of the two objectives of interest. We employ an interactive method in which a decision maker iteratively provides preference information to find the most preferred management plan and learns about the interdependencies of the objectives at the same time. The method is illustrated with a case study in which biodiversity is assessed through an index calculated from the characteristics of the forest. Uncertainty is included both through modifying the input data according to the accuracy of current inventory methods and through growth model errors. This uncertainty is described using a set of 25 scenarios. Involving multiple components of risk is a highly relevant approach in multiobjective forestry; however, estimation of the uncertainty of biodiversity needs further attention.