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Optimal forest harvest age considering carbon sequestration in multiple carbon pools: A comparative statics analysis

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  • Asante, Patrick
  • Armstrong, Glen W.

Abstract

We present an analytical model for determination of the economically optimal harvest age of a forest stand considering timber value, and the value of carbon fluxes in living biomass, dead organic matter, and wood products pools. Through comparative statics analysis, we find that consideration of timber value and fluxes in biomass carbon increase harvest age relative to the timber only solution, and that the effect on optimal harvest age of incorporating fluxes in the dead organic matter and wood products pools is indeterminate.

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  • Asante, Patrick & Armstrong, Glen W., 2012. "Optimal forest harvest age considering carbon sequestration in multiple carbon pools: A comparative statics analysis," Journal of Forest Economics, Elsevier, vol. 18(2), pages 145-156.
    • Handle: RePEc:eee:foreco:v:18:y:2012:i:2:p:145-156
    DOI: 10.1016/j.jfe.2011.12.002
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    References listed on IDEAS

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    1. Glen W. Armstrong & William E. Phillips, 1989. "The Optimal Timing of Land Use Changes From Forestry to Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 37(1), pages 125-134, March.
    2. Asante, Patrick & Armstrong, Glen W. & Adamowicz, Wiktor L., 2011. "Carbon sequestration and the optimal forest harvest decision: A dynamic programming approach considering biomass and dead organic matter," Journal of Forest Economics, Elsevier, vol. 17(1), pages 3-17, January.
    3. Kurz, W.A. & Dymond, C.C. & White, T.M. & Stinson, G. & Shaw, C.H. & Rampley, G.J. & Smyth, C. & Simpson, B.N. & Neilson, E.T. & Trofymow, J.A. & Metsaranta, J. & Apps, M.J., 2009. "CBM-CFS3: A model of carbon-dynamics in forestry and land-use change implementing IPCC standards," Ecological Modelling, Elsevier, vol. 220(4), pages 480-504.
    4. 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.
    5. 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.
    6. 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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    Citations

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    Cited by:

    1. Holtsmark, Bjart & Hoel, Michael & Holtsmark, Katinka, 2013. "Optimal harvest age considering multiple carbon pools – A comment," Journal of Forest Economics, Elsevier, vol. 19(1), pages 87-95.
    2. An, Hyunjin, 2017. "Forest Carbon Sequestration And Optimal Harvesting Decision Considering Southern Pine Beetle (Spb) Disturbance: A Real Option Approach," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 40(Special, ), December.
    3. Chen, Si & Shahi, Chander & Chen, Han Y.H. & Kumar, Praveen & Ma, Zilong & McLaren, Brian, 2018. "Trade-offs and Synergies Between Economic Gains and Plant Diversity Across a Range of Management Alternatives in Boreal Forests," Ecological Economics, Elsevier, vol. 151(C), pages 162-172.
    4. Susaeta, Andres & Chang, Sun Joseph & Carter, Douglas R. & Lal, Pankaj, 2014. "Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States," Journal of Forest Economics, Elsevier, vol. 20(1), pages 47-64.
    5. Yu, Zhihan & Ning, Zhuo & Chang, Wei-Yew & Chang, Sun Joseph & Yang, Hongqiang, 2023. "Optimal harvest decisions for the management of carbon sequestration forests under price uncertainty and risk preferences," Forest Policy and Economics, Elsevier, vol. 151(C).
    6. Triviño, María & Juutinen, Artti & Mazziotta, Adriano & Miettinen, Kaisa & Podkopaev, Dmitry & Reunanen, Pasi & Mönkkönen, Mikko, 2015. "Managing a boreal forest landscape for providing timber, storing and sequestering carbon," Ecosystem Services, Elsevier, vol. 14(C), pages 179-189.
    7. Hoel, Michael & Holtsmark, Bjart & Holtsmark, Katinka, 2014. "Faustmann and the climate," Journal of Forest Economics, Elsevier, vol. 20(2), pages 192-210.
    8. Rørstad, Per Kristian, 2022. "Payment for CO2 sequestration affects the Faustmann rotation period in Norway more than albedo payment does," Ecological Economics, Elsevier, vol. 199(C).
    9. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    10. Chang, Sun Joseph, 2020. "Twenty one years after the publication of the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 118(C).
    11. Zhou, Wei & Gao, Lan, 2016. "The impact of carbon trade on the management of short-rotation forest plantations," Forest Policy and Economics, Elsevier, vol. 62(C), pages 30-35.
    12. Juutinen, Artti & Ahtikoski, Anssi & Lehtonen, Mika & Mäkipää, Raisa & Ollikainen, Markku, 2018. "The impact of a short-term carbon payment scheme on forest management," Forest Policy and Economics, Elsevier, vol. 90(C), pages 115-127.
    13. Hongqiang Yang & Xiaobiao Zhang, 2016. "A Rethinking of the Production Approach in IPCC: Its Objectiveness in China," Sustainability, MDPI, vol. 8(3), pages 1-13, February.
    14. Yu, Jinna & Yao, Shunbo & Zhang, Bisheng, 2014. "Designing afforestation subsidies that account for the benefits of carbon sequestration: A case study using data from China's Loess Plateau," Journal of Forest Economics, Elsevier, vol. 20(1), pages 65-76.
    15. Xie, Yalin & Lei, Xiangdong & Shi, Jingning, 2020. "Impacts of climate change on biological rotation of Larix olgensis plantations for timber production and carbon storage in northeast China using the 3-PGmix model," Ecological Modelling, Elsevier, vol. 435(C).
    16. Chen, Si & Shahi, Chander & Chen, Han Y.H. & McLaren, Brian, 2017. "Economic analysis of forest management alternatives: Compositional objectives, rotation ages, and harvest methods in boreal forests," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 124-134.

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    More about this item

    Keywords

    Optimal rotation; Boreal forest; Carbon market;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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