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Impact of payments for carbon sequestered in wood products and avoided carbon emissions on the profitability of NIPF landowners in the US South

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  • Dwivedi, Puneet
  • Bailis, Robert
  • Stainback, Andrew
  • Carter, Douglas R.

Abstract

This study determines economic impact of payments for carbon sequestered in wood products and avoided carbon emissions due to use of forest biomass for electricity generation instead of fossil fuels on the profitability of non-industrial private forest (NIPF) landowners in the US South. Penalties for carbon emitted at the time of undertaking various silvicultural activities and exponential decay of wood products were also considered. We used life-cycle assessment to evaluate carbon emissions from various silvicultural activities. We modified the traditional Faustmann forest rotation model to incorporate identified carbon payments and penalties. Slash pine (Pinus elliottii) was selected as a representative species. We found that the overall global warming impact (GWI) for managing a hectare of intensively managed slash pine plantation was 6539kg carbon dioxide equivalent. The maximum land expectation value (LEV) for the scenario when all carbon payments and penalties along with payments for timber products were considered was $1299/ha using a 20year rotation age. This value is about 71% higher than the LEV when only payments for timber products were taken into account ($760/ha using a 21year rotation age). Our results clearly indicate that emerging carbon markets could greatly benefit southern NIPF landowners.

Suggested Citation

  • Dwivedi, Puneet & Bailis, Robert & Stainback, Andrew & Carter, Douglas R., 2012. "Impact of payments for carbon sequestered in wood products and avoided carbon emissions on the profitability of NIPF landowners in the US South," Ecological Economics, Elsevier, vol. 78(C), pages 63-69.
  • Handle: RePEc:eee:ecolec:v:78:y:2012:i:c:p:63-69
    DOI: 10.1016/j.ecolecon.2012.03.014
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    References listed on IDEAS

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    1. Creedy, John & Wurzbacher, Anke D., 2001. "The economic value of a forested catchment with timber, water and carbon sequestration benefits," Ecological Economics, Elsevier, vol. 38(1), pages 71-83, July.
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    Cited by:

    1. Masum, Md Farhad Hossain & Dwivedi, Puneet & Anderson, William F., 2020. "Estimating unit production cost, carbon intensity, and carbon abatement cost of electricity generation from bioenergy feedstocks in Georgia, United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 117(C).
    2. Dwivedi, Puneet & Khanna, Madhu & Sharma, Ajay & Susaeta, Andres, 2016. "Efficacy of carbon and bioenergy markets in mitigating carbon emissions on reforested lands: A case study from Southern United States," Forest Policy and Economics, Elsevier, vol. 67(C), pages 1-9.
    3. Hu, Lijiao & Stainback, George & Li, Xiaoshu, 2016. "Economic Analysis of Carbon Sequestration under Risks in Forest management," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229983, Southern Agricultural Economics Association.
    4. Brèteau-Amores, Sandrine & Brunette, Marielle & Davi, Hendrik, 2019. "An Economic Comparison of Adaptation Strategies Towards a Drought-induced Risk of Forest Decline," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.

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