Journal of Forest Economics > Vol 19 > Issue 4

Dual discounting in climate change mitigation in the forest sector

Hanne K. Sjølie, Department of Ecology and Natural Resource Management, Norwegian University of Life Sciences, Norway, hanne.sjolie@umb.no Greg S. Latta, Department of Forest Engineering, Resources and Management, Oregon State University, USA, greg.latta@oregonstate.edu Birger Solberg, Department of Ecology and Natural Resource Management, Norwegian University of Life Sciences, Norway, birger.solberg@umb.no
 
Suggested Citation
Hanne K. Sjølie, Greg S. Latta and Birger Solberg (2013), "Dual discounting in climate change mitigation in the forest sector", Journal of Forest Economics: Vol. 19: No. 4, pp 416-431. http://dx.doi.org/10.1016/j.jfe.2013.07.001

Published: 0/12/2013
© 0 2013 Hanne K. Sjølie, Greg S. Latta, Birger Solberg
 
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Keywords
JEL Codes:Q34Q54Q57
Climate policyCarbon sequestrationBoreal forestryPartial equilibriumForest sector modeling
 

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Introduction
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Results
Discussion
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Abstract

The efficiency of potential climate change mitigation is predicated on future costs and benefits and thus heavily influenced by the discount scheme. Dual discounting involves discounting carbon and monetary values differently; stand level modeling efforts show that it improves the profitability of afforestation projects. However, these stand level results may not hold across other age classes and stocking levels. Using a partial, spatial equilibrium model of the Norwegian forest sector, we analyze the impacts of a dual discounting scheme on climate change mitigation efforts. Dual discounting results in less mitigation efforts in the first decades but substantially higher long-term mitigation efforts.

DOI:10.1016/j.jfe.2013.07.001