Journal of Forest Economics > Vol 20 > Issue 1

Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States

Andres Susaeta, School of Forest Resources and Conservation, USA, asusaeta@ufl.edu , Sun Joseph Chang, School of Renewable Natural Resources, USA, Douglas R. Carter, School of Forest Resources and Conservation, USA, Pankaj Lal, Department of Earth and Environmental Studies, USA
 
Suggested Citation
Andres Susaeta, Sun Joseph Chang, Douglas R. Carter and Pankaj Lal (2014), "Economics of carbon sequestration under fluctuating economic environment, forest management and technological changes: An application to forest stands in the southern United States", Journal of Forest Economics: Vol. 20: No. 1, pp 47-64. http://dx.doi.org/10.1016/j.jfe.2013.08.001

Publication Date: 0/1/2014
© 0 2014 Andres Susaeta, Sun Joseph Chang, Douglas R. Carter, Pankaj Lal
 
Subjects
 
Keywords
JEL Codes:C610Q230Q570
Carbon sequestrationHarvest agePrice of carbonLand expectation value
 

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In this article:
Introduction 
Model specification 
Economic implications of the generalized van Kooten model on the optimal harvest age 
Model application to loblolly pine plantations 
Simulation results 
Discussion 
Concluding remarks 

Abstract

This study presents a model that determines the effect of current and future payments for carbon sequestration, proportion of wood that sequesters carbon in long-lived product and landfills, and amount of carbon in the wood, on the optimal current forest harvest age. Increased current and future prices of carbon would lead to a longer and shorter harvest age, respectively. Higher current prices of carbon could increase the supply of carbon at a decreasing rate due to longer harvest ages. Moderate prices of carbon would encourage landowners to maintain standing timber. Policies focused then on stimulating landowners to hold timber on forestlands may not necessarily imply higher amounts of sequestered carbon. Increased future values of carbon could imply a reduction of the current supply of carbon.

DOI:10.1016/j.jfe.2013.08.001