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The Economic Value of Carbon Sequestration through Tree Planting in Laos

Author

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  • Vongdalone Vongsikeo

    (Michigan Technological University, College of Business, Academic Office Building, Houghton, Michigan, USA.)

  • William S. Breffle

    (Michigan Technological University, College of Business, Academic Office Building, Houghton, Michigan, USA.)

  • Jenny L. Apriesnig

    (Michigan Technological University, College of Business, Academic Office Building, Houghton, Michigan, USA.)

  • Brian D. Barkdoll

    (Michigan Technological University, Civil and Environmental Engineering Department, USA.)

Abstract

Because tree plantations in Laos show that, despite high profitability, tree farmers and private companies face many challenges, including low timber quality, low timber prices, and slow plantation expansion, the aim of this study is to evaluate the social costs and benefits from private tree plantations by considering both market and non-market values, specifically for carbon sequestration. A policy decision tool - specifically cost-benefit analysis ? was employed. Existing data from Laos and other locations were used to investigate the economic and social aspects of government policy implications for forest plantation for eucalyptus and teak. A dual-discounting approach was applied to discount future net benefits of market and non-market components to arrive at a present value. We found the monetary benefit of carbon sequestration of teak and eucalyptus tree plantations to be $472.8 million (2020 dollars) over 30 years. It is concluded that the government should intervene by improving systems and regulations that can increase the private rate of return and eventually incentivize the private sector to plant more trees.

Suggested Citation

  • Vongdalone Vongsikeo & William S. Breffle & Jenny L. Apriesnig & Brian D. Barkdoll, 2020. "The Economic Value of Carbon Sequestration through Tree Planting in Laos," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(2), pages 102-111, June.
    • Handle: RePEc:asi:adprev:2020:p:102-111
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    References listed on IDEAS

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    1. Maraseni, Tek Narayan & Phimmavong, Somvang & Keenan, Rodney J. & Vongkhamsao, Vongvilay & Cockfield, Geoff & Smith, Hilary, 2018. "Financial returns for different actors in a teak timber value chain in Paklay District, Lao PDR," Land Use Policy, Elsevier, vol. 75(C), pages 145-154.
    2. Yohe, Gary W. & Tol, Richard S. J. & Anthoff, David, 2009. "Discounting for Climate Change," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-22.
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    5. Bonzanigo, Laura & Kalra, Nidhi, 2014. "Making informed investment decisions in an uncertain world : a short demonstration," Policy Research Working Paper Series 6765, The World Bank.
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    More about this item

    Keywords

    Environmental sustainability; Cost-benefit analysis; Social values; Natural resource policy.;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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