Optimal Forest Management for Carbon Sequestration: A Case Study of Eucalyptus urophylla and Acacia mangium in Yen Bai Province, Vietnam

The main objective of this study is to find out optimal management strategies for productive planted forests when carbon benefits are considered. With a given initial state of forest, the research attempts to: a) determine the planting and harvesting patterns, which can maximize net returns from selling timber and sequestering carbon; b) compare the optimal management strategy when carbon has or does not have market value; c) compare the optimal management strategy for two dominant tree species; d) analyse the sensitivity of the optimal management strategy to forests’ area, prices and discount rate; and e) identify the policy implications in further developing multiple-use forests in Vietnam. The Faustmann formula was applied to find the optimal rotation age and the net present value (NPV) for planted forest at stand-level. We extended the Faustmann model to include multi-stands and spatial arrangement among forest stands in order to analyse the optimal strategy at forest-level. A simple search algorithm was used to look for optimal sets of planting and harvesting. The model was coded in GAMS. To evaluate the model, 293 household forest farmers who grow Eucalyptus urophylla and Acacia mangium in Yen Bai province, Northern Vietnam were interviewed. Survey results show that the actual tree cutting age is five years. However, at the stand-level, we find that the optimal rotation age of E. urophylla (when only timber has market value) is 10 and 9 years for households and forest enterprises, respectively, at a 5% discount rate. For A. mangium, the optimal rotation age is 13 years for both households and forest enterprises. The NPV is VND 16 million per hectare for households of both E. urophylla and A. mangium. For forest enterprises, the NPV is VND 57 million and VND 62 million per hectare for E. urophylla and A. mangium, respectively