Economics of size-structured forestry with carbon storage

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Assmuth , A , Ramo , J & Tahvonen , O 2018 , ' Economics of size-structured forestry with carbon storage ' , Canadian Journal of Forest Research , vol. 48 , no. 1 , pp. 11-22 .

Title: Economics of size-structured forestry with carbon storage
Author: Assmuth, Aino; Ramo, Janne; Tahvonen, Olli
Contributor organization: Department of Forest Sciences
Economic-ecological optimization group
Helsinki Institute of Sustainability Science (HELSUS)
Environmental and Resource Economics
Forest Economics, Business and Society
Date: 2018-01
Language: eng
Number of pages: 12
Belongs to series: Canadian Journal of Forest Research
ISSN: 0045-5067
Abstract: We study the economics of carbon storage using a model that includes forest size structure and determines the choice between rotation forestry and continuous cover forestry. Optimal harvests may rely solely on thinning, implying infinite rotation and continuous cover forestry, or both thinning and clearcuts, implying finite rotation periods. Given several carbon prices and interest rates, we optimize the timing and intensity of thinnings along with the choice of management regime. In addition to the carbon storage in living trees, we include the carbon dynamics of dead trees and timber products. Forest growth is specified by an empirically validated transition matrix model for Norway spruce (Picea abies (L.) Karst.). The optimization problem is solved in its general dynamic form by applying bilevel optimization with gradient-based interior point methods and a genetic algorithm. Carbon pricing postpones thinnings, increases stand density by directing harvests to larger trees, and typically yields a regime shift from rotation forestry to continuous cover forestry. In continuous cover solutions, the steady-state harvesting interval and the diameter distribution of standing and harvested trees are sensitive to carbon price, implying that carbon pricing increases the sawlog ratio of timber yields. Additionally, we obtain relatively inexpensive stand-level marginal costs of carbon storage.
Subject: carbon sequestration
carbon subsidy
continuous cover forestry
management regimes
optimal rotation
uneven-aged forestry
4112 Forestry
Peer reviewed: Yes
Usage restriction: openAccess
Self-archived version: acceptedVersion

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