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Forecasting the effect of carbon price and log price on the afforestation rate in New Zealand

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  • Manley, Bruce

Abstract

The Emissions Trading Scheme (ETS) enacted in New Zealand in 2008 allows forest growers to claim units for carbon sequestered by new forests. As afforestation is an important contributor to New Zealand meeting net emission targets there is interest in forecasting the rate of afforestation, particularly how it will vary with the price of carbon in the ETS. Consequently a model is developed to estimate afforestation rate from the Land Expectation Value (LEV) of ‘traditional’ forestry (i.e., revenues only from log sales), the LEV from the carbon trading opportunity that the ETS creates, and land value.

Suggested Citation

  • Manley, Bruce, 2018. "Forecasting the effect of carbon price and log price on the afforestation rate in New Zealand," Journal of Forest Economics, Elsevier, vol. 33(C), pages 112-120.
    • Handle: RePEc:eee:foreco:v:33:y:2018:i:c:p:112-120
    DOI: 10.1016/j.jfe.2017.11.002
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    References listed on IDEAS

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    1. Kerr, Suzi & Anastasiadis, Simon & Olssen, Alex & Power, William & Timar, Levente & Zhang, Wei, 2012. "Spatial and Temporal Responses to an Emissions Trading System Covering Agriculture and Forestry: Simulation Results from New Zealand," Motu Working Papers 189545, Motu Economic and Public Policy Research.
    2. Haim, David & White, Eric M. & Alig, Ralph J., 2014. "Permanence of agricultural afforestation for carbon sequestration under stylized carbon markets in the U.S," Forest Policy and Economics, Elsevier, vol. 41(C), pages 12-21.
    3. David Haim & Ralph J. Alig & Andrew J. Plantinga & Brent Sohngen, 2011. "Climate Change And Future Land Use In The United States: An Economic Approach," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 27-51.
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    5. Dorner, Zack & Hyslop, Dean, 2014. "Modelling Changing Rural Land Use in New Zealand 1997 to 2008 Using a Multinomial Logit Approach," Motu Working Papers 290602, Motu Economic and Public Policy Research.
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    7. Manley, Bruce & Maclaren, Piers, 2012. "Potential impact of carbon trading on forest management in New Zealand," Forest Policy and Economics, Elsevier, vol. 24(C), pages 35-40.
    8. Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
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    Cited by:

    1. Tang, Kai, 2024. "Agricultural adaptation to the environmental and social consequences of climate change in mixed farming systems: Evidence from North Xinjiang, China," Agricultural Systems, Elsevier, vol. 217(C).
    2. Manley, Bruce, 2020. "Impact on profitability, risk, optimum rotation age and afforestation of changing the New Zealand emissions trading scheme to an averaging approach," Forest Policy and Economics, Elsevier, vol. 116(C).

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    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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