IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v118y2020ics1389934120302148.html
   My bibliography  Save this article

Optimizing rotation periods of forest plantations: The effects of carbon accounting regimes

Author

Listed:
  • Hou, Guolong
  • Delang, Claudio O.
  • Lu, Xixi
  • Olschewski, Roland

Abstract

Forests have a huge potential to produce timber and sequester carbon in a joint process. Thus, afforestation projects have been widely undertaken across countries to achieve poverty alleviation and environment protection goals, specifically in reducing atmospheric carbon dioxide. Our study determines the optimal rotation periods of afforestation projects with three different tree species (Chinese fir, Eucalyptus, and Poplar) in various Chinese regions. Applying a modified Hartman rotation model, our results show that the optimal rotation period increases for all examined species, when considering the joint production of timber and carbon sequestration. However, they also indicate that carbon accounting regimes have a significant impact on the optimum rotation as well as on the revenue calculations. We distinguish between temporary (tCER) and long-term (lCER) Certified Emission Reductions. The present value of lCER revenues is three to four times higher than those generated by tCER for the same plantation in the initial 5 to 10 years. In contrast, when the project period extends to 30 years, the present value of lCER revenues is at least two times lower than the present value of tCERs. Therefore, forest managers have an incentive to apply tCER accounting to finance slow-growing plantations, and lCER for fast-growing ones. We conduct a sensitivity analysis with respect to changes in discount rates and carbon prices. While the optimal decision for Chinese fir is highly sensitive to changes in both variables under tCER accounting, the results concerning Eucalyptus are most sensitive under the lCER accounting regime. In contrast, carbon revenues have a minimal impact on the optimal rotation of Poplar plantations, no matter which regime is applied. Our findings can contribute to the efficient and sustainable management of carbon sequestration projects, while the methodology can also be applied to other regions in the developing world.

Suggested Citation

  • Hou, Guolong & Delang, Claudio O. & Lu, Xixi & Olschewski, Roland, 2020. "Optimizing rotation periods of forest plantations: The effects of carbon accounting regimes," Forest Policy and Economics, Elsevier, vol. 118(C).
    • Handle: RePEc:eee:forpol:v:118:y:2020:i:c:s1389934120302148
    DOI: 10.1016/j.forpol.2020.102263
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934120302148
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2020.102263?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Juutinen, Artti & Ahtikoski, Anssi & Lehtonen, Mika & Mäkipää, Raisa & Ollikainen, Markku, 2018. "The impact of a short-term carbon payment scheme on forest management," Forest Policy and Economics, Elsevier, vol. 90(C), pages 115-127.
    2. Tavoni, Massimo & Sohngen, Brent & Bosetti, Valentina, 2007. "Forestry and the carbon market response to stabilize climate," Energy Policy, Elsevier, vol. 35(11), pages 5346-5353, November.
    3. Galinato, Gregmar I. & Olanie, Aaron & Uchida, Shinsuke & Yoder, Jonathan K., 2011. "Long-term versus temporary certified emission reductions in forest carbon sequestration programs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 1-23.
    4. Olschewski, Roland & Benitez, Pablo C., 2005. "Secondary forests as temporary carbon sinks? The economic impact of accounting methods on reforestation projects in the tropics," Ecological Economics, Elsevier, vol. 55(3), pages 380-394, November.
    5. Couture, Stéphane & Reynaud, Arnaud, 2011. "Forest management under fire risk when forest carbon sequestration has value," Ecological Economics, Elsevier, vol. 70(11), pages 2002-2011, September.
    6. Gu, Lei & Wu, Weiguang & Ji, Wei & Zhou, Mengjie & Xu, Lin & Zhu, Weiqiang, 2019. "Evaluating the performance of bamboo forests managed for carbon sequestration and other co-benefits in Suichang and Anji, China," Forest Policy and Economics, Elsevier, vol. 106(C), pages 1-1.
    7. Manley, Bruce & Maclaren, Piers, 2012. "Potential impact of carbon trading on forest management in New Zealand," Forest Policy and Economics, Elsevier, vol. 24(C), pages 35-40.
    8. Denys Yemshanov & Daniel W. McKenney & Terry Hatton & Glenn Fox, 2005. "Investment Attractiveness of Afforestation in Canada Inclusive of Carbon Sequestration Benefits," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 307-323, December.
    9. Cho, Seong-Hoon & Lee, Juhee & Roberts, Roland & Yu, Edward T. & Armsworth, Paul R., 2018. "Impact of market conditions on the effectiveness of payments for forest-based carbon sequestration," Forest Policy and Economics, Elsevier, vol. 92(C), pages 33-42.
    10. Stéphane S. Couture & Arnaud A. Reynaud, 2011. "Forest management under fire risk when forest carbon sequestration has value," Post-Print hal-02651317, HAL.
    11. Gregmar I. Galinato & Shinsuke Uchida, 2011. "The Effect of Temporary Certified Emission Reductions on Forest Rotations and Carbon Supply," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59(1), pages 145-164, March.
    12. Hartman, Richard, 1976. "The Harvesting Decision When a Standing Forest Has Value," Economic Inquiry, Western Economic Association International, vol. 14(1), pages 52-58, March.
    13. Olschewski, Roland & Benítez, Pablo C., 2010. "Optimizing joint production of timber and carbon sequestration of afforestation projects," Journal of Forest Economics, Elsevier, vol. 16(1), pages 1-10, January.
    14. Yu, Jinna & Yao, Shunbo & Zhang, Bisheng, 2014. "Designing afforestation subsidies that account for the benefits of carbon sequestration: A case study using data from China's Loess Plateau," Journal of Forest Economics, Elsevier, vol. 20(1), pages 65-76.
    15. Zhou, Wei & Gao, Lan, 2016. "The impact of carbon trade on the management of short-rotation forest plantations," Forest Policy and Economics, Elsevier, vol. 62(C), pages 30-35.
    16. West, Thales A.P. & Wilson, Chris & Vrachioli, Maria & Grogan, Kelly A., 2019. "Carbon payments for extended rotations in forest plantations: Conflicting insights from a theoretical model," Ecological Economics, Elsevier, vol. 163(C), pages 70-76.
    17. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.
    18. Pandit, Ram, 2018. "REDD+ adoption and factors affecting respondents' knowledge of REDD+ goal: Evidence from household survey of forest users from REDD+ piloting sites in Nepal," Forest Policy and Economics, Elsevier, vol. 91(C), pages 107-115.
    19. Olschewski, Roland & Benítez, Pablo C. & de Koning, G.H.J. & Schlichter, Tomás, 2005. "How attractive are forest carbon sinks? Economic insights into supply and demand of Certified Emission Reductions," Journal of Forest Economics, Elsevier, vol. 11(2), pages 77-94, September.
    20. Gregmar Galinato & Shinsuke Uchida, 2010. "Evaluating Temporary Certified Emission Reductions in Reforestation and Afforestation Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(1), pages 111-133, May.
    21. Wytze van der Gaast & Richard Sikkema & Moriz Vohrer, 2018. "The contribution of forest carbon credit projects to addressing the climate change challenge," Climate Policy, Taylor & Francis Journals, vol. 18(1), pages 42-48, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pinnschmidt, Arne & Yousefpour, Rasoul & Nölte, Anja & Hanewinkel, Marc, 2023. "Tropical mixed-species plantations can outperform monocultures in terms of carbon sequestration and economic return," Ecological Economics, Elsevier, vol. 211(C).
    2. Shanshan Wang & Jiaxin Chen & Michael T. Ter‐Mikaelian & Annie Levasseur & Hongqiang Yang, 2022. "From carbon neutral to climate neutral: Dynamic life cycle assessment for wood‐based panels produced in China," Journal of Industrial Ecology, Yale University, vol. 26(4), pages 1437-1449, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    2. Juutinen, Artti & Ahtikoski, Anssi & Lehtonen, Mika & Mäkipää, Raisa & Ollikainen, Markku, 2018. "The impact of a short-term carbon payment scheme on forest management," Forest Policy and Economics, Elsevier, vol. 90(C), pages 115-127.
    3. Gren, Ing-Marie & Zeleke, Abenezer Aklilu, 2016. "Policy design for forest carbon sequestration: A review of the literature," Forest Policy and Economics, Elsevier, vol. 70(C), pages 128-136.
    4. Djanibekov, Utkur & Khamzina, Asia & Djanibekov, Nodir & Lamers, John P.A., 2012. "How attractive are short-term CDM forestations in arid regions? The case of irrigated croplands in Uzbekistan," Forest Policy and Economics, Elsevier, vol. 21(C), pages 108-117.
    5. Olschewski, Roland & Benítez, Pablo C., 2010. "Optimizing joint production of timber and carbon sequestration of afforestation projects," Journal of Forest Economics, Elsevier, vol. 16(1), pages 1-10, January.
    6. Indrajaya, Yonky & van der Werf, Edwin & Weikard, Hans-Peter & Mohren, Frits & van Ierland, Ekko C., 2016. "The potential of REDD+ for carbon sequestration in tropical forests: Supply curves for carbon storage for Kalimantan, Indonesia," Forest Policy and Economics, Elsevier, vol. 71(C), pages 1-10.
    7. Brèteau-Amores, Sandrine & Brunette, Marielle & Davi, Hendrik, 2019. "An Economic Comparison of Adaptation Strategies Towards a Drought-induced Risk of Forest Decline," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    8. Gregmar I. Galinato & Aaron Olanie & Shinsuke Uchida & Jonathan K. Yoder, 2011. "Long‐term versus temporary certified emission reductions in forest carbon sequestration programs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 537-559, October.
    9. Cerdá, Emilio & Martín-Barroso, David, 2013. "Optimal control for forest management and conservation analysis in dehesa ecosystems," European Journal of Operational Research, Elsevier, vol. 227(3), pages 515-526.
    10. Yonky Indrajaya & Edwin van der Werf & Ekko van Ierland & Frits Mohren, 2014. "Optimal Forest Management when Logging Damages and Costs Differ between Logging Practices," CESifo Working Paper Series 4606, CESifo.
    11. Susaeta, Andres & Adams, Damian C. & Gonzalez-Benecke, Carlos, 2017. "Economic vulnerability of southern US slash pine forests to climate change," Journal of Forest Economics, Elsevier, vol. 28(C), pages 18-32.
    12. Susaeta, Andres & Chang, Sun Joseph & Carter, Douglas R. & Lal, Pankaj, 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, Elsevier, vol. 20(1), pages 47-64.
    13. O’Donoghue, Cathal & O’Fatharta, Eoin & Geoghegan, Cathal & Ryan, Mary, 2024. "Farmland afforestation: Forest optimal rotation ages across discrete optimisation objectives," Land Use Policy, Elsevier, vol. 139(C).
    14. Mandaloufas, Melissa & Lamas, Wendell de Queiroz & Brown, Scott & Irizarry Quintero, Anamari, 2015. "Energy balance analysis of the Brazilian alcohol for flex fuel production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 403-414.
    15. Gren, Ing-Marie & Carlsson, Mattias & Elofsson, Katarina & Munnich, Miriam, 2012. "Stochastic carbon sinks for combating carbon dioxide emissions in the EU," Energy Economics, Elsevier, vol. 34(5), pages 1523-1531.
    16. G. Cornelis van Kooten & Tim Bogle & Frans P. de Vries, 2012. "Rent Seeking and the Smoke and Mirrors Game in the Creation of Forest Sector Carbon Credits: An Example from British Columbia," Working Papers 2012-06, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    17. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
    18. Dumollard, Gaspard, 2018. "Multiple-stand forest management under fire risk: Analytical characterization of stationary rotation ages and optimal carbon sequestration policy," Journal of Forest Economics, Elsevier, vol. 32(C), pages 146-154.
    19. Miettinen, Jenni & Ollikainen, Markku & Nieminen, Tiina M. & Ukonmaanaho, Liisa & Laurén, Ari & Hynynen, Jari & Lehtonen, Mika & Valsta, Lauri, 2014. "Whole-tree harvesting with stump removal versus stem-only harvesting in peatlands when water quality, biodiversity conservation and climate change mitigation matter," Forest Policy and Economics, Elsevier, vol. 47(C), pages 25-35.
    20. Hernandez, M. & Gómez, T. & Molina, J. & León, M.A. & Caballero, R., 2014. "Efficiency in forest management: A multiobjective harvest scheduling model," Journal of Forest Economics, Elsevier, vol. 20(3), pages 236-251.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:118:y:2020:i:c:s1389934120302148. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.