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Can Carbon Offset Trading Promote Economic Development in Forest-Dependent and First Nations Communities?

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  • van Kooten, G. Cornelis

Abstract

Forest-dependent, rural communities often experience declining populations and prosperity because technological changes related to harvesting, transportation and processing of wood fiber occur more rapidly than technical improvements in fiber availability – in forest growth. How then can communities where forest resources are the primary economic driver increase wealth that might then be used for economic development? Answers to this question are explored by examining the potential of different management regimes to create greater employment and wealth, particularly management options that include carbon values. Our application is to an interior forest region of British Columbia, the province where First Nations control the most timber supply and the region that produces the greatest volume and value of lumber for export. We examine the trade-offs between revenue as measured by net present value, employment and carbon in forest ecosystems, where the latter is a proxy for the ecological health of the forest. We conclude from the analysis that no management strategy is able to satisfy all of the technical, environmental and social/cultural constraints and, at the same time, offer forest-based economic development that will prevent the decline of rural communities. Nonetheless, given knowledge of tradeoffs, there are management options that can improve upon current employment, wealth and/or ecological health of the forest.

Suggested Citation

  • van Kooten, G. Cornelis, 2018. "Can Carbon Offset Trading Promote Economic Development in Forest-Dependent and First Nations Communities?," Working Papers 270681, University of Victoria, Resource Economics and Policy.
    • Handle: RePEc:ags:uvicwp:270681
    DOI: 10.22004/ag.econ.270681
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    1. van Kooten, G. Cornelis, 2018. "The Challenge of Mitigating Climate Change through Forestry Activities: What Are the Rules of the Game?," Ecological Economics, Elsevier, vol. 146(C), pages 35-43.
    2. Johnston, Craig M.T. & Cornelis van Kooten, G., 2015. "Back to the past: Burning wood to save the globe," Ecological Economics, Elsevier, vol. 120(C), pages 185-193.
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    More about this item

    Keywords

    Community/Rural/Urban Development; Resource /Energy Economics and Policy;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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