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The potential and cost of increasing forest carbon sequestration in Sweden

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  • Guo, Jinggang
  • Gong, Peichen

Abstract

This paper examines the potential and the cost of promoting forest carbon sequestration through a tax/subsidy to land owners for reducing/increasing carbon storage in their forests. We use a partial equilibrium model based on intertemporal optimization to estimate the impacts of carbon price (the tax/subsidy rate) on timber harvest volume and price in different time periods and on the change of forest carbon stock over time. The results show that a higher carbon price would lead to higher forest carbon stocks. The tax/subsidy induced annual net carbon sequestration is declining over time. The net carbon sequestration during 2015–2050 would increase by 30.2 to 218.3 million tonnes of CO2, when carbon price increases from 170SEK to 1428SEK per tonne of CO2. The associated cost, in terms of reduced total benefits of timber and other non-timber goods, ranges from 80SEK to 105.8SEK per tonne of CO2. The change in carbon sequestration (as compared with the baseline case) beyond 2050 is small when carbon price is 680SEK per tonne of CO2 or lower. With a carbon price of 1428SEK per tonne of CO2, carbon sequestration will increase by 70 million tonnes of CO2 from the baseline level during 2050-2070, and by 64 million tonnes during 2070–2170.

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  • Guo, Jinggang & Gong, Peichen, 2017. "The potential and cost of increasing forest carbon sequestration in Sweden," Journal of Forest Economics, Elsevier, vol. 29(PB), pages 78-86.
    • Handle: RePEc:eee:foreco:v:29:y:2017:i:pb:p:78-86
    DOI: 10.1016/j.jfe.2017.09.001
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    Cited by:

    1. Xuexiang Li & Wanlin Hu & Fan Zhang & Jinxin Zhang & Feng Sheng & Xiangyu Xu, 2022. "Carbon Sink Cost and Influence Factors Analysis in a National Afforestation Project under Different Investment Modes," IJERPH, MDPI, vol. 19(13), pages 1-15, June.
    2. Gren, Ing-Marie & Tirkaso, Wondmagegn, 2021. "Costs and equity of uncertain greenhouse gas reductions – fuel, food and negative emissions in Sweden," Energy Economics, Elsevier, vol. 104(C).
    3. Guo, Jinggang & Gong, Peichen, 2019. "Assessing the impacts of rising fuelwood demand on Swedish forest sector: An intertemporal optimization approach," Forest Policy and Economics, Elsevier, vol. 105(C), pages 91-98.
    4. Gren, Ing-Marie, 2024. "A trading market for uncertain carbon removal by land use in the EU," Forest Policy and Economics, Elsevier, vol. 159(C).
    5. Ming-Yun Chu & Wan-Yu Liu, 2021. "Assessing the Opportunity Cost of Carbon Stock Caused by Land-Use Changes in Taiwan," Land, MDPI, vol. 10(11), pages 1-15, November.
    6. Miguel Riviere & Sylvain Caurla, 2020. "Representations of the Forest Sector in Economic Models [Les représentations du secteur forestier dans les modèles économiques]," Post-Print hal-03088084, HAL.
    7. Liu, Wan-Yu & Chiang, Yi-Hua & Lin, Chun-Cheng, 2022. "Adopting renewable energies to meet the carbon reduction target: Is forest carbon sequestration cheaper?," Energy, Elsevier, vol. 246(C).
    8. Szajkó, Gabriella & Rácz, Viktor József & Kis, András, 2024. "The role of price incentives in enhancing carbon sequestration in the forestry sector of Hungary," Forest Policy and Economics, Elsevier, vol. 158(C).
    9. Chu, Long & Grafton, R. Quentin & Nguyen, Hai, 2022. "A global analysis of the break-even prices to reduce atmospheric carbon dioxide via forest plantation and avoided deforestation," Forest Policy and Economics, Elsevier, vol. 135(C).

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    More about this item

    Keywords

    Forest sector model; Climate change mitigation; Carbon sequestration; Carbon price; Timber supply;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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