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Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States

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  • Susaeta, Andres
  • Chang, Sun Joseph
  • Carter, Douglas R.
  • Lal, Pankaj

Abstract

This study presents a model that determines the effect of current and future payments for carbon sequestration, proportion of wood that sequesters carbon in long-lived product and landfills, and amount of carbon in the wood, on the optimal current forest harvest age. Increased current and future prices of carbon would lead to a longer and shorter harvest age, respectively. Higher current prices of carbon could increase the supply of carbon at a decreasing rate due to longer harvest ages. Moderate prices of carbon would encourage landowners to maintain standing timber. Policies focused then on stimulating landowners to hold timber on forestlands may not necessarily imply higher amounts of sequestered carbon. Increased future values of carbon could imply a reduction of the current supply of carbon.

Suggested Citation

  • Susaeta, Andres & Chang, Sun Joseph & Carter, Douglas R. & Lal, Pankaj, 2014. "Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States," Journal of Forest Economics, Elsevier, vol. 20(1), pages 47-64.
    • Handle: RePEc:eee:foreco:v:20:y:2014:i:1:p:47-64
    DOI: 10.1016/j.jfe.2013.08.001
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    Citations

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    Cited by:

    1. Patrice Loisel & Guillerme Duvillié & Denis Barbeau & Brigitte Charnomordic, 2019. "EvaSylv: A user-friendly software to evaluate forestry scenarii including natural risk," Working Papers hal-02282504, HAL.
    2. Susaeta, Andres & Carney, Tyler, 2023. "Optimal regimes of prescribed burning in forest plantations in the presence of risk of wildfires in the southeastern United States," Forest Policy and Economics, Elsevier, vol. 151(C).
    3. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    4. Loisel, Patrice, 2020. "Under the risk of destructive event, are there differences between timber income based and carbon sequestration based silviculture?," Forest Policy and Economics, Elsevier, vol. 120(C).
    5. Chang, Sun Joseph, 2018. "Forest property taxation under the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 88(C), pages 38-45.
    6. Chang, Sun Joseph, 2020. "Twenty one years after the publication of the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 118(C).
    7. Ekholm, Tommi, 2016. "Optimal forest rotation age under efficient climate change mitigation," Forest Policy and Economics, Elsevier, vol. 62(C), pages 62-68.
    8. Ekholm, Tommi, 2020. "Optimal forest rotation under carbon pricing and forest damage risk," Forest Policy and Economics, Elsevier, vol. 115(C).
    9. Tommi Ekholm, 2015. "Optimal forest rotation age under efficient climate change mitigation," Papers 1505.05669, arXiv.org, revised Oct 2015.
    10. Susaeta, Andres & Adams, Damian C. & Gonzalez-Benecke, Carlos, 2017. "Economic vulnerability of southern US slash pine forests to climate change," Journal of Forest Economics, Elsevier, vol. 28(C), pages 18-32.

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    More about this item

    Keywords

    Carbon sequestration; Harvest age; Price of carbon; Land expectation value;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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