Abstract
The carbon sink of boreal forests can be increased by paying forest landowners for carbon sequestration and taxing carbon releases. The aim of the study was to analyze the effect of carbon pricing on optimal forest management when forests are managed for maximal discounted benefits from timber production and carbon payments. A 0.5% random sample of all private forest stands of Finland was used in the analyses (48,842 stands). Calculations were performed for a 100-year time horizon. It was assumed that the carbon balance (difference between sequestrated carbon and released carbon) in the forest (trees and soil) or the carbon balance of forestry (trees, soil and wood-based products) was subsidized (positive balance) or taxed (negative balance) by 0, 50, 100 or 150 € t−1, corresponding to CO2 prices of 0, 13.6, 27.3 or 40.9 € t−1, respectively. The results showed that paying forest landowners 150 € t−1 of carbon sequestrated in forests would lead to the cessation of all cuttings everywhere in Finland for at least 100 years. In the northern part of the country, a carbon price of 100 € t−1 would be enough to make the no-cutting management economically optimal. A low carbon price had the highest relative impact (value of increased sequestration divided by the cost of carbon payments). The benefit/cost ratio of carbon subsidies was higher in the northern part of boreal zone than in the southern parts. Subsidizing within-forest carbon sequestration by 50 € t−1 would increase the carbon sequestration of Finnish forestry by 50%, ranging from 36% (south Finland) to 116% (north Finland). A payment of 100 € t−1 or more would increase carbon sequestration by 70%, which is nearly the maximum possible increase that can be obtained by carbon subsidies.
Highlights
Forests sequestrate carbon from the atmosphere into the living biomass pool, from which it flows to the soil carbon pool in the form of litter, dead trees and harvest residues
A payment of 100 € t−1 or more would increase carbon sequestration by 70%, which is nearly the maximum possible increase that can be obtained by carbon subsidies
When carbon credits were based on the total carbon balance of forestry, the optimal harvest level was never zero (Fig. 4, top)
Summary
Forests sequestrate carbon from the atmosphere into the living biomass pool, from which it flows to the soil carbon pool in the form of litter, dead trees and harvest residues. A part of the carbon of cut trees goes to the carbon pool of woodbased products. The two first pools (living tree biomass and soil) are located in the same forest where the sequestration occurs whereas the third pool (wood-based products) is located elsewhere and may be distributed over wide areas, even over different continents. Measuring the carbon sequestration of forests can be done by monitoring changes in the living biomass and in the dead organic matter (DOM). Since the soil carbon pool is more stable than the carbon pool of living
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