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Forest rotation lengths under carbon sequestration payments

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  • David Appels

    (Productivity Commission)

Abstract

Carbon dioxide emissions resulting from direct human activities, primarily fossil fuel use and land clearing, have altered the global carbon cycle. Carbon is absorbed (sequestered) by plant matter during photosynthesis, so that approximately 50% of the dry weight of a forest’s biomass is carbon. This paper examines how payments to foresters for the carbon sequestered in their trees would affect harvesting decisions. It uses a theoretical multi-crop model adapted from the original Faustmann formula to consider different scenarios of the degree of carbon liability incurred at the time of harvest, and their impact on the length of the optimal crop rotation. These results are then contrasted with the equivalent output from a numerical model based on a simulated New South Wales Pinus radiata plantation. The finding of the paper provides an insight into which carbon sequestration payment policy would be the best at aligning public and private incentives.

Suggested Citation

  • David Appels, 2001. "Forest rotation lengths under carbon sequestration payments," Others 0110007, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpot:0110007
    Note: Type of Document - Pdf; pages: 19 ; figures: included
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0110/0110007.pdf
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    References listed on IDEAS

    as
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    6. Larsen, Bjorn & Shah, Anwar, 1994. "Global Tradeable Carbon Permits, Participation Incentives, and Transfers," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 841-856, Supplemen.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Pajot, Guillaume, 2011. "Rewarding carbon sequestration in South-Western French forests: A costly operation?," Journal of Forest Economics, Elsevier, vol. 17(4), pages 363-377.
    2. Murtough, Greg & Aretino, Barbara & Matysek, Anna, 2002. "Creating Markets for Ecosystem Services," Staff Research Papers 31912, Productivity Commission.
    3. Chladna, Zuzana, 2007. "Determination of optimal rotation period under stochastic wood and carbon prices," Forest Policy and Economics, Elsevier, vol. 9(8), pages 1031-1045, May.

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    More about this item

    Keywords

    carbon sequestration;

    JEL classification:

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

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