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An Economic Valuation of Forest Carbon Sink in a Resource-Based City on the Loess Plateau

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  • Xinlei Liu

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China
    Shenmu Municipal Ecology and Environment Bureau, Yulin 719300, China)

  • Ya Yang

    (Institute of Earth Sciences, China University of Geosciences, Beijing 100083, China)

  • Ping Shen

    (Beijing KD TsingYuan Ecological Technology Co., Ltd., Beijing 100083, China)

  • Xingyu Liu

    (Institute of Earth Sciences, China University of Geosciences, Beijing 100083, China)

Abstract

Forest carbon sink (FCS) is essential for achieving carbon neutrality and supporting sustainable development in ecologically fragile, resource-based cities such as those on the Loess Plateau. Despite the success of national afforestation programs, economic valuations of FCS at the city level remain limited. This study develops an integrated framework combining carbon stock estimation, regional carbon pricing, and net present value (NPV)-based valuation. Using Shenmu City in Shaanxi Province as a case study, forest carbon stocks from 2010 to 2023 are estimated based on the 2006 IPCC Guidelines. Future stocks (2024–2060) are projected using the GM (1,1) model. A dynamic pricing mechanism with a government-guaranteed floor price is applied under three offset scenarios (5%, 10%, 15%). The results show that Shenmu’s forest carbon stock could reach 20.67 million tonnes of CO 2 by 2060, and under a 15% offset scenario, the peak NPV reaches CNY 4.02 billion. Higher offset ratios increase FCS value by 18–22%, reflecting the growing scarcity of carbon credits. The pricing model improves market stability and investor confidence. This study provides a replicable approach for carbon sink valuation in semi-arid areas and offers policy insights aligned with SDG 13 (Climate Action) and SDG 15 (Life on Land).

Suggested Citation

  • Xinlei Liu & Ya Yang & Ping Shen & Xingyu Liu, 2025. "An Economic Valuation of Forest Carbon Sink in a Resource-Based City on the Loess Plateau," Sustainability, MDPI, vol. 17(13), pages 1-32, June.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:13:p:5786-:d:1685782
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    References listed on IDEAS

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