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Economic analysis of carbon sequestration and bioenergy production under catastrophic risk and price uncertainty

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  • Hu, Lijiao

Abstract

This paper investigates how payments for carbon offsets and bioenergy impact the optimal management of hardwood forests under conditions of risk and price uncertainty that represents by the use of an E-V model. The results show that higher carbon price increases LEV and rotation age; fire risk decreases LEV and rotation age.

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  • Hu, Lijiao, 2014. "Economic analysis of carbon sequestration and bioenergy production under catastrophic risk and price uncertainty," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162566, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea14:162566
    DOI: 10.22004/ag.econ.162566
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    References listed on IDEAS

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    1. Clarke, Harry R. & Reed, William J., 1989. "The tree-cutting problem in a stochastic environment : The case of age-dependent growth," Journal of Economic Dynamics and Control, Elsevier, vol. 13(4), pages 569-595, October.
    2. Tol, Richard S. J., 2008. "The Social Cost of Carbon: Trends, Outliers and Catastrophes," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-22.
    3. Willassen, Yngve, 1998. "The stochastic rotation problem: A generalization of Faustmann's formula to stochastic forest growth," Journal of Economic Dynamics and Control, Elsevier, vol. 22(4), pages 573-596, April.
    4. Yin, Runsheng & Newman, David H., 1996. "The Effect of Catastrophic Risk on Forest Investment Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 186-197, September.
    5. Englin, Jeffrey E. & Boxall, Peter C. & Hauer, Grant, 2000. "An Empirical Examination Of Optimal Rotations In A Multiple-Use Forest In The Presence Of Fire Risk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-14, July.
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    Cited by:

    1. 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.

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    Environmental Economics and Policy;

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