Two sets of initial conditions on boreal forest carbon storage economics

Abstract

Two sets of initial conditions are used in the investigation of capital return rate and carbon storage in boreal forests. Firstly, a growth model is applied in young stands as early as the inventory-based model is applicable. Secondly, the growth model is applied to observed wooded stands. Four sets of thinning schedules are investigated in either case. The two sets of initial conditions yield similar results. The capital return rate is a weak function of rotation age, which results in variability in the optimal number of thinnings. Reducing the number of thinnings to one increases timber stock but induces a capital return rate deficiency. The deficiency per excess volume unit is smaller if the severity of any thinning is restricted by the removal of large trees only. Omission of thinnings best applies to spruce-dominated stands with stem count less than 2000/ha. Restricted thinning intensity applies to deciduous stands and dense pine stands. The albedo effect increases the benefits of restricted thinnings and increased clearcuttings instead of contradicting the carbon storage.

Capitalization and Capital Return in Boreal Carbon Forestry

“…Figure 16 indicates that a significant excess volume can be produced at the expense of a monetary capital return rate deficiency in the order of one to two Euros/excess cubic meter per annum. This can be easily compensated by a carbon rent derived from European carbon emission prices valid at the time of writing [18,19,40]. On the other hand, such compensation is needed to achieve a large-scale increment in carbon sequestration.…”

“…On the other hand, such compensation is needed to achieve a large-scale increment in carbon sequestration. It has been recently shown that the carbon stock can be increased without deteriorating the wood supply for forest-based industries [40].…”

“…The "normal forest principle" is rather useful when considering silvicultural practices, but seldom applies to the valuation of real-life real estate firms, with generally non-uniform stand age distribution. However, it has recently been shown [40] that the principle is not necessary for the simplification of Equation (3) into (4). This happens by focusing on a single stand, instead of an entire estate or enterprise, and considering that time proceeds linearly.…”

“…The two different sets of initial conditions have been described in three earlier investigations [14,15,40]. Firstly, a group of nine setups was created computationally, containing three tree species and three initial sapling densities [15].…”

Two Manifestations of Market Premium in the Capitalization of Carbon-Forest Estates

“…For climate change mitigation purposes, some institutions include carbon sequestration in their business strategies [27,28]. However, enhanced carbon sequestration generally induces a deficiency in the gained financial benefit [29,30,31,32,33].…”