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Optimizing forest management in Finland with carbon subsidies and taxes

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  • Pukkala, Timo

Abstract

The carbon balance of forestry depends on the management, assortment distribution of harvested wood, end use of products, harvesting and processing releases, and substitution effects. This study developed a simulation-optimization system in which all these elements were incorporated. The simulation model consisted of a typical tree stand growth simulator augmented with a decomposition model for calculating carbon releases from the decomposition of deadwood, cutting residues, and products. The model allows managers and policy makers to analyze the effects of carbon pricing, substitution rates and assortment distributions, among others, on the optimal stand management, and estimate the carbon balances of alternative management systems. The case study calculations showed that the long-term carbon balance of a managed forest is negative without substitution effects. Substitution effects may convert the balance from negative to positive. The carbon balance of pine forest is clearly better than that of spruce forest, which is mainly because of the poor carbon balance of spruce pulpwood. If there are no substitution effects, forest management is a carbon source with 0.1 t ha- 1 a- 1 of carbon releases from pine forestry, and 0.5 t ha- 1 a- 1 from spruce forestry. With low substitution rates (50% of carbon in biofuel and 33% of carbon in sawn wood replace fossil carbon), spruce is carbon-neutral and pine is a clear sink with 0.38 t ha- 1 a- 1 carbon sequestration. The same sink effect can be obtained in spruce forestry with a higher substitution rate (75% of carbon in biofuel and 67% of carbon in sawn wood replace fossil carbon).

Suggested Citation

  • Pukkala, Timo, 2011. "Optimizing forest management in Finland with carbon subsidies and taxes," Forest Policy and Economics, Elsevier, vol. 13(6), pages 425-434, July.
  • Handle: RePEc:eee:forpol:v:13:y:2011:i:6:p:425-434
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    References listed on IDEAS

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    1. 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.
    2. Pohjola, J. & Valsta, L., 2007. "Carbon credits and management of Scots pine and Norway spruce stands in Finland," Forest Policy and Economics, Elsevier, vol. 9(7), pages 789-798, April.
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    1. Hoel, Michael & Holtsmark, Bjart & Holtsmark, Katinka, 2014. "Faustmann and the climate," Journal of Forest Economics, Elsevier, vol. 20(2), pages 192-210.
    2. Zubizarreta-Gerendiain, Ane & Pukkala, Timo & Peltola, Heli, 2016. "Effects of wood harvesting and utilisation policies on the carbon balance of forestry under changing climate: a Finnish case study," Forest Policy and Economics, Elsevier, vol. 62(C), pages 168-176.
    3. 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.
    4. Elias Hurmekoski & Tanja Myllyviita & Jyri Seppälä & Tero Heinonen & Antti Kilpeläinen & Timo Pukkala & Tuomas Mattila & Lauri Hetemäki & Antti Asikainen & Heli Peltola, 2020. "Impact of structural changes in wood‐using industries on net carbon emissions in Finland," Journal of Industrial Ecology, Yale University, vol. 24(4), pages 899-912, August.
    5. Triviño, María & Juutinen, Artti & Mazziotta, Adriano & Miettinen, Kaisa & Podkopaev, Dmitry & Reunanen, Pasi & Mönkkönen, Mikko, 2015. "Managing a boreal forest landscape for providing timber, storing and sequestering carbon," Ecosystem Services, Elsevier, vol. 14(C), pages 179-189.
    6. Verkerk, P.J. & Mavsar, R. & Giergiczny, M. & Lindner, M. & Edwards, D. & Schelhaas, M.J., 2014. "Assessing impacts of intensified biomass production and biodiversity protection on ecosystem services provided by European forests," Ecosystem Services, Elsevier, vol. 9(C), pages 155-165.
    7. Heinonen, Tero & Pukkala, Timo & Mehtätalo, Lauri & Asikainen, Antti & Kangas, Jyrki & Peltola, Heli, 2017. "Scenario analyses for the effects of harvesting intensity on development of forest resources, timber supply, carbon balance and biodiversity of Finnish forestry," Forest Policy and Economics, Elsevier, vol. 80(C), pages 80-98.
    8. Sampo Soimakallio & Tuomo Kalliokoski & Aleksi Lehtonen & Olli Salminen, 2021. "On the trade-offs and synergies between forest carbon sequestration and substitution," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 26(1), pages 1-17, January.
    9. Luo, Li & Gao, Yuan & Regan, Courtney M. & Summers, David M. & Connor, Jeffery D. & O'Hehir, Jim & Meng, Li & Chow, Christopher W.K., 2024. "Emissions offset incentives, carbon storage and profit optimization for Australian timber plantations," Forest Policy and Economics, Elsevier, vol. 159(C).
    10. 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.

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