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Dual discounting in climate change mitigation in the forest sector

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  • Sjølie, Hanne K.
  • Latta, Greg S.
  • Solberg, Birger

Abstract

The efficiency of potential climate change mitigation is predicated on future costs and benefits and thus heavily influenced by the discount scheme. Dual discounting involves discounting carbon and monetary values differently; stand level modeling efforts show that it improves the profitability of afforestation projects. However, these stand level results may not hold across other age classes and stocking levels. Using a partial, spatial equilibrium model of the Norwegian forest sector, we analyze the impacts of a dual discounting scheme on climate change mitigation efforts. Dual discounting results in less mitigation efforts in the first decades but substantially higher long-term mitigation efforts.

Suggested Citation

  • Sjølie, Hanne K. & Latta, Greg S. & Solberg, Birger, 2013. "Dual discounting in climate change mitigation in the forest sector," Journal of Forest Economics, Elsevier, vol. 19(4), pages 416-431.
    • Handle: RePEc:eee:foreco:v:19:y:2013:i:4:p:416-431
    DOI: 10.1016/j.jfe.2013.07.001
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    Cited by:

    1. Price, Colin, 2017. "Optimal rotation with differently-discounted benefit streams," Journal of Forest Economics, Elsevier, vol. 26(C), pages 1-8.
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    3. Miguel RIVIERE & Sylvain CAURLA, 2018. "Integrating non-timber objectives into bio-economic models of the forest sector: a review of recent innovations and current shortcomings," Working Papers of BETA 2018-26, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Lugovoy, O. & Polbin, A., 2016. "On Intergenerational Distribution of the Burden of Greenhouse Gas Emissions," Journal of the New Economic Association, New Economic Association, vol. 31(3), pages 12-39.

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    More about this item

    Keywords

    Climate policy; Carbon sequestration; Boreal forestry; Partial equilibrium; Forest sector modeling;
    All these keywords.

    JEL classification:

    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • 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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