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Tree Farm Licence 45

The Role of the Base Case

In considering the factors required under Section 7 to be addressed in AAC determinations, I am assisted by timber supply forecasts provided to me through the work of the Timber Supply Review project for TSAs and, for TFLs, by the licensees.

For each AAC determination a timber supply analysis is carried out, using a data package of information from three categories: land base inventory, timber growth and yield, and management practices. Using this set of data, and a computer simulation model, timber supply forecasts are produced. These include sensitivity analyses of changes in various assumptions around a baseline option, normally referred to as the "base case" forecast, which forms the basis for comparison when assessing the effects of uncertainty on timber supply.

The base case forecast represents only one in a number of theoretical forecasts, and may incorporate information about which there is some uncertainty. Its validity—as with all the other forecasts provided¾depends on the validity of the data and assumptions incorporated into the computer simulation used to generate it. Therefore, much of what follows in the considerations outlined below is an examination of the degree to which all the assumptions made in generating the base case forecast are realistic and current, and the degree to which its predictions of timber supply must be adjusted, if necessary, to more properly reflect the current situation.

These adjustments are made on the basis of informed judgement, using current information available about forest management, which¾particularly during the period leading up to, and now during, the implementation of the Forest Practices Code¾may well have changed since the original data package was assembled.

Thus it is important to remember, in reviewing the considerations which lead to the AAC determination, that while the timber supply analysis with which I am provided is integral to those considerations, the AAC determination itself is not a calculation but a synthesis of judgement and analysis in which numerous risks and uncertainties are weighed. Depending upon the outcome of these considerations, the AAC determined may or may not coincide with the base case forecast. But once an AAC has been determined that reflects appropriate assessment of all the factors required to be considered, no additional precision or validation may be gained by attempting a computer analysis of the combined considerations to confirm the exact AAC determined¾it would be impossible for any such analysis to fully incorporate the subtleties of the judgement involved.

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