Carbon rotation ages and the offset measurement conundrum: An extended review

The Faustmann-Hartman rotation age literature focuses on the commercial and amenity values of timber. Amenity values are a direct function of the volume on the stand at any time (Hartman) and/or the change in volume (carbon values). The rotation-age is extended to include concern that warming levels are a function of cumulative emissions, and, depending on timeframes, whether temporary storage in post-harvest wood product (PHWP) sinks influence the climate once re-emissions are considered. When carbon fluxes occur and how they are valued is important! If carbon values are discounted at the social rate of time preference, cumulative emissions are considered less important than they ought to be. The tension between the social rate of time preference and a rate used to discount the value of future carbon fluxes affects the optimal rotation age calculation. It creates a divergence between the socially and privately optimal rotation ages that is not accounted for by monetary discount rates or a carbon price, even though carbon pricing is regarded as the best means of correcting the climate externality. Results also indicate that forests should not be left unharvested for carbon benefits.