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The Economic Value of a Forested Catchment with Timber, Water and Carbon Sequestration Benefits

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  • Creedy, J.
  • Wurzbacher, A.D.

Abstract

This paper examines the optimal management strategy for a forested catchment that yields timber, water and carbon sequestration benefits. The Faustmann multiple rotation model is extended to allow for the maximisation of the net present value of these timber and non-timber benefits. The model is applied to the Thomson Catchment in Central Gippsland, Victoria. Carbon sequestration benefits are modelled via total stand biomass accumulation. The cost of carbon release back into the atmosphere upon logging is estimated as a function of rotation age using an adjusted pulpwood/sawlog ratio. The allowance for both non-timber benefits is found to lengthen the optimal rotation, in a large range of cases to infinity.

Suggested Citation

  • Creedy, J. & Wurzbacher, A.D., 2000. "The Economic Value of a Forested Catchment with Timber, Water and Carbon Sequestration Benefits," Department of Economics - Working Papers Series 753, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:753
    Note: This paper has now been published in: Creedy, J. and Wurzbacher, A.D. (2001), The Economic Value of a Forested Catchment with Timber, Water and Carbon Sequestration Benefits, Ecological Economics, 38, pp. 71-83.
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    6. 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.
    7. 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.
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    More about this item

    Keywords

    NATURAL RESOURCES ; ECONOMIC MODELS ; ECONOMICS;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • D00 - Microeconomics - - General - - - General

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