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Determining optimal forest rotation ages and carbon offset credits: Accounting for post‐harvest carbon storehouses

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  • G. Cornelis van Kooten
Abstract
Sequestering carbon in forest ecosystems is important for mitigating climate change. A major policy concern is whether forests should be left unharvested to avoid carbon dioxide (CO2) emissions and store carbon, or harvested to take advantage of potential carbon storage in post‐harvest wood product sinks and removal of CO2 from the atmosphere by new growth. The issue is addressed in this paper by examining carbon rotation ages that consider commercial timber as well as carbon values. A discrete‐time optimal rotation age model is developed that employs data on carbon fluxes stored in both living and dead biomass as opposed to carbon as a function of timber growth. Carbon is allocated to several ecosystem and post‐harvest product pools that decay over time at different rates. In addition, the timing of carbon fluxes is taken into account by weighting future carbon fluxes as less important than current ones. Using simple formulae for determining optimal rotation ages, we find that: (1) Reducing the price of timber while increasing the price of carbon will increase rotation age, perhaps to infinity (stand remains unharvested). (2) An increase in the rate used to discount physical carbon generally reduces the rotation age, but not in all cases. (3) As a corollary, an increase in the price of carbon increases or reduces rotation age depending on the weight chosen to discount future carbon fluxes. (4) Site characteristics and the mix of species on the site affect conclusions (2) and (3). (5) A large variety of carbon offset credits from forestry activities could be justified, which makes it difficult to accept any. La séquestration du carbone dans les écosystèmes forestiers est importante pour atténuer les changements climatiques. Une préoccupation politique majeure est de savoir si les forêts devraient être laissées en friche pour éviter les émissions de CO2 et stocker le carbone, ou exploitées pour tirer parti du potentiel de stockage du carbone dans les puits de produits ligneux post‐récolte et de l’élimination du CO2 de l'atmosphère par une nouvelle croissance. La question est abordée dans le présent document en examinant les âges de rotation du carbone qui tiennent compte du bois commercial ainsi que des valeurs du carbone. Un modèle d’âge de rotation optimal en temps discret est développé qui utilise les données sur les flux de carbone stockés dans la biomasse vivante et morte par opposition au carbone en fonction de la croissance du bois. Le carbone est attribué à plusieurs bassins de produits écosystémiques et post‐récolte qui se décomposent à différents taux au fil du temps. En outre, le calendrier des flux de carbone est pris en compte en pondérant les flux de carbone futurs comme moins importants que les flux actuels. En utilisant des formules simples pour déterminer les âges de rotation optimaux, nous constatons que : (1) Réduire le prix du bois tout en augmentant le prix du carbone augmentera l’âge de rotation, peut‐être à l'infini (le peuplement reste non récolté). (2) Une augmentation du taux d'actualisation du carbone physique réduit généralement l’âge de rotation, mais pas dans tous les cas. (3) Comme corollaire, une augmentation du prix du carbone augmente ou réduit l’âge de rotation selon le poids choisi pour réduire les flux de carbone futurs. (4) Les caractéristiques du site et le mélange des espèces présentes sur le site influent sur les conclusions (2) et (3). (5) Une grande variété de crédits compensatoires de carbone provenant des activités forestières pourrait être justifiée, ce qui rend difficile d'en accepter.

Suggested Citation

  • G. Cornelis van Kooten, 2023. "Determining optimal forest rotation ages and carbon offset credits: Accounting for post‐harvest carbon storehouses," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(2), pages 255-272, June.
    • Handle: RePEc:bla:canjag:v:71:y:2023:i:2:p:255-272
    DOI: 10.1111/cjag.12333
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    References listed on IDEAS

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    1. van Kooten, G. Cornelis, 2017. "Forest carbon offsets and carbon emissions trading: Problems of contracting," Forest Policy and Economics, Elsevier, vol. 75(C), pages 83-88.
    2. Sandmo, Agnar, 1998. "Redistribution and the marginal cost of public funds," Journal of Public Economics, Elsevier, vol. 70(3), pages 365-382, December.
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    4. van Kooten, G. Cornelis, 2018. "The Challenge of Mitigating Climate Change through Forestry Activities: What Are the Rules of the Game?," Ecological Economics, Elsevier, vol. 146(C), pages 35-43.
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    12. Ekholm, Tommi, 2020. "Optimal forest rotation under carbon pricing and forest damage risk," Forest Policy and Economics, Elsevier, vol. 115(C).
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    Cited by:

    1. Manley, Bruce, 2023. "Impact of carbon price on the relative profitability of production forestry and permanent forestry for New Zealand plantations," Forest Policy and Economics, Elsevier, vol. 156(C).
    2. G. Cornelis van Kooten & Rebecca Zanello, 2023. "Carbon offsets and agriculture: Options, obstacles, and opinions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(3-4), pages 375-391, September.

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