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The impact of carbon trade on the management of short-rotation forest plantations

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  • Zhou, Wei
  • Gao, Lan

Abstract

We extended the Hartman model to examine the optimal rotation, taking into consideration the economic benefits of wood and the dynamics of three carbon pools (aboveground biomass, dead organic matter, and harvested forest products). Chinese fir (Cunninghamia lanceolata) stands in Southern China were taken for a numerical example to analyze the effects of carbon price on the optimal management of short-rotation plantations. The results show that, with the current price of carbon, introducing the effects of harvesting on different carbon pools into the decision model would increase the optimal rotation age on poor (SI=10) and medium (SI=17) sites by one year, while it does not have any impact on the optimal rotation for good sites (SI=21). Irrespective of site condition, the optimal rotation age is not sensitive to carbon price and interest rate. An increase in interest rate by 1% would reduce the optimal rotation age by one year. In conclusion, forest carbon trade could effectively enhance land owners' income from short-rotation forest plantations. However, it does not lead to any significant increase in forest carbon sink.

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  • 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.
    • Handle: RePEc:eee:forpol:v:62:y:2016:i:c:p:30-35
    DOI: 10.1016/j.forpol.2015.10.008
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    References listed on IDEAS

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    1. Holtsmark, Bjart & Hoel, Michael & Holtsmark, Katinka, 2013. "Optimal harvest age considering multiple carbon pools – A comment," Journal of Forest Economics, Elsevier, vol. 19(1), pages 87-95.
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    Cited by:

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    2. Zhang, Wanshi & Wu, Yunlei & Li, Xiuwei & Cheng, Feng & Zhang, Xiaosong, 2021. "Performance investigation of the wood-based heat localization regenerator in liquid desiccant cooling system," Renewable Energy, Elsevier, vol. 179(C), pages 133-149.
    3. Yu, Zhihan & Ning, Zhuo & Chang, Wei-Yew & Chang, Sun Joseph & Yang, Hongqiang, 2023. "Optimal harvest decisions for the management of carbon sequestration forests under price uncertainty and risk preferences," Forest Policy and Economics, Elsevier, vol. 151(C).
    4. Abdul-Manan, Amir F.N. & Arfaj, Abdullah & Babiker, Hassan, 2017. "Oil refining in a CO2 constrained world: Effects of carbon pricing on refineries globally," Energy, Elsevier, vol. 121(C), pages 264-275.
    5. Mingjun Sun & Hongjun Peng & Shuai Wang, 2018. "Cost-Sharing Mechanisms for A Wood Forest Product Supply Chain under Carbon Cap-and-Trade," Sustainability, MDPI, vol. 10(12), pages 1-19, November.
    6. 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).
    7. Xinyue Yang & Ye Song & Mingjun Sun & Hongjun Peng, 2020. "Strategies for Capital Constrained Timber and Carbon Sink Supply Chain under the Cap-and-Trade Scheme," Sustainability, MDPI, vol. 12(11), pages 1-15, May.

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