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Fire Risk and the Economics of Sequestering Carbon in Forests

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  • Stainback, G. Andrew
  • Alavalapati, Janaki R.R.

Abstract

The impact of fire risk on slash pine (Pinus elliottii) plantations managed for the joint production of carbon and timber benefits was investigated. A Hartman model for determining the optimal rotation age and Land Expectation Value (LEV) for a stand with both carbon and timber benefits was extended to include the risk of fire. Information from this model was then used to determine optimal rotation age, LEV, carbon supply and timber supply as a function of fire risk and the price of carbon. The results indicate that fire risk reduces all of these variables and this reduction is greater for higher carbon prices. These results suggest that landowner's would respond less to a carbon market when the level of fire risk is relatively high.

Suggested Citation

  • Stainback, G. Andrew & Alavalapati, Janaki R.R., 2002. "Fire Risk and the Economics of Sequestering Carbon in Forests," 2002 Annual meeting, July 28-31, Long Beach, CA 19629, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea02:19629
    DOI: 10.22004/ag.econ.19629
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    References listed on IDEAS

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    1. Hartman, Richard, 1976. "The Harvesting Decision When a Standing Forest Has Value," Economic Inquiry, Western Economic Association International, vol. 14(1), pages 52-58, March.
    2. Andrew Stainback, G. & Alavalapati, Janaki R.R., 2002. "Economic analysis of slash pine forest carbon sequestration in the southern U. S," Journal of Forest Economics, Elsevier, vol. 8(2), pages 105-117.
    3. G. Cornelis van Kooten & Clark S. Binkley & Gregg Delcourt, 1995. "Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 365-374.
    4. Reed, William J., 1984. "The effects of the risk of fire on the optimal rotation of a forest," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 180-190, June.
    5. Englin, Jeffrey E. & Boxall, Peter C. & Hauer, Grant, 2000. "An Empirical Examination Of Optimal Rotations In A Multiple-Use Forest In The Presence Of Fire Risk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-14, July.
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