Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services

Kooten, G. Cornelis van; Binkley, Clark S.; Delcourt, Gregg

doi:10.2307/1243546

Cited by 393 publications

(209 citation statements)

References 3 publications

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“…, K and we denote by p k the net price associated with product k. We assume that the share of timber products varies according to tree age. 4 We denote by δ k (t) the share of timber volume used for product k for a tree of age t. By definition, we have:…”

Section: Timber Benefitsmentioning

confidence: 99%

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Forest management under fire risk when forest carbon sequestration has value

Couture¹,

Reynaud

2011

Ecological Economics

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In this paper, we develop a multiple forest use model to determine the optimal harvest date for a forest stand producing both timber and carbon benefits under a risk of fire. The preferences of the representative non-industrial private forest (NIPF) owner are modeled though an expected utility specification. We introduce saving as a decision of the forest owner at any time. The problems of forest management and saving decisions are solved simultaneously using a stochastic dynamic programming method. A numerical programming method is used to characterize the optimal forest and saving policies. We apply this framework to model the behavior of a representative NIPF owner located in the Southwest of France. The empirical application indicates that a higher risk of fire will decrease the optimal rotation period, while higher carbon prices will increase the optimal harvesting age. We show that increasing the risk of fire leads to a reduction in rotation duration. On the contrary, a higher carbon price makes carbon sequestration more profitable, thereby leading to increasing the rotation duration. We then show how the carbon price/risk of fire frontier is affected by risk aversion.

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Section: Timber Benefitsmentioning

confidence: 99%

“…The implications for NIPF owners of introducing carbon services have been studied in many articles, usually using a Faustmann-type framework. Several articles have considered a deterministic context (Hoen [3]; VanKooten et al [4]; Romero et al [5];…”

Section: Introductionmentioning

confidence: 99%

Forest management under fire risk when forest carbon sequestration has value

Couture¹,

Reynaud

2011

Ecological Economics

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“…Even though values of carbon storage and sequestration will tend to coincide in the long term because all carbon fixed through photosynthesis will eventually be released back to the atmosphere (Liski et al 2001), they represent different aspects of climate regulation when considering forest management for a short period of time. Trees sequester carbon as they grow, so a critical aspect in carbon sequestration is the rate of tree growth (van Kooten et al 1995). Usually fast-growing tree species sequester more carbon at the beginning of their lives, whereas carbon sequestration rates for slowgrowing trees will be higher later on (Nghiem 2014).…”

Section: Introductionmentioning

confidence: 99%

Managing a boreal forest landscape for providing timber, storing and sequestering carbon

et al. 2015

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Human well-being highly depends on ecosystem services and this dependence is expected to increase in the future with an increasing population and economic growth. Studies that investigate trade-offs between ecosystem services are urgently needed for informing policy-makers. We examine the trade-offs between a provisioning (revenues from timber selling) and regulating (carbon storage and sequestration) ecosystem services among seven alternative forest management regimes in a large boreal forest production landscape. First, we estimate the potential of the landscape to produce harvest revenues and store/sequester carbon across a 50-year time period. Then, we identify conflicts between harvest revenues and carbon storage and sequestration. Finally, we apply multiobjective optimization to find optimal combinations of forest management regimes that maximize harvest revenues and carbon storage/sequestration. Our results show that no management regime alone is able to either maximize harvest revenues or carbon services and that a combination of different regimes is always necessary. We also show that with a relatively little economic investment (5% decrease in harvest revenues), a substantial increase in carbon services could be attained (9% for carbon storage; 15-23% for carbon sequestration). We conclude that it is possible to achieve win-win situations applying diversified forest management planning at a landscape level.

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“…The country can choose to tax debits and subsidize credits (e.g., see van Kooten et al 1995), or cap net debits and then permit trade. The only real obstacle that remains to be overcome relates to the measurement and monitoring of carbon uptake and release from a terrestrial sink, which greatly increase transaction costs.…”

Section: Addressing Duration and Transaction Costs: A Plausible Approachmentioning

confidence: 99%

Biological carbon sequestration and carbon trading re-visited

Kooten

2009

Climatic Change

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Biological activities that sequester carbon create CO 2 offset credits that could obviate the need for reductions in fossil fuel use. Credits are earned by storing carbon in terrestrial ecosystems and wood products, although CO 2 emissions are also mitigated by delaying deforestation, which accounts for one-quarter of anthropogenic CO 2 emissions. However, non-permanent carbon offsets from biological activities are difficult to compare with each other and with emissions reduction because they differ in how long they prevent CO 2 from entering the atmosphere. This is the duration problem. It results in uncertainty and makes it hard to determine the legitimacy of biological activities in mitigating climate change. Measuring, verifying and monitoring the carbon sequestered in sinks greatly increases transaction costs and leads to rent seeking by sellers of dubious sink credits. While biological sink activities undoubtedly help mitigate climate change and should not be neglected, it is shown that there are limits to the substitutability between temporary offset credits from these activities and emissions reduction, and that this has implications for carbon trading. A possible solution to inherent incommensurability between temporary and permanent credits is also suggested.

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Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services

Cited by 393 publications

References 3 publications

Forest management under fire risk when forest carbon sequestration has value

Forest management under fire risk when forest carbon sequestration has value

Managing a boreal forest landscape for providing timber, storing and sequestering carbon

Biological carbon sequestration and carbon trading re-visited

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