Economic Impact of Net Carbon Payments and Bioenergy Production in Fertilized and Non-Fertilized Loblolly Pine Plantations

Prativa Shrestha,Puneet Dwivedi,George Stainback

doi:10.3390/f6093045

Prativa Shrestha, Puneet Dwivedi + Show 1 more

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https://doi.org/10.3390/f6093045

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Journal: Forests	Publication Date: Aug 31, 2015
Citations: 34	License type: CC BY 4.0

Affiliation: Mississippi State University, University of Georgia

Abstract

Sequestering carbon in forest stands and using woody bioenergy are two potential ways to utilize forests in mitigating emissions of greenhouse gases (GHGs). Such forestry related strategies are, however, greatly influenced by carbon and bioenergy markets. This study investigates the impact of both carbon and woody bioenergy markets on land expectation value (LEV) and rotation age of loblolly pine (Pinus taeda L.) forests in the southeastern United States for two scenarios—one with thinning and no fertilization and the other with thinning and fertilization. Economic analysis was conducted using a modified Hartman model. The amount of carbon dioxide (CO2) emitted during various activities such as management of stands, harvesting, and product decay was included in the model. Sensitivity analysis was conducted with a range of carbon offset, wood for bioenergy, and forest product prices. The results showed that LEV increased in both management scenarios as the price of carbon and wood for bioenergy increased. However, the results indicated that the management scenario without fertilizer was optimal at low carbon prices and the management scenario with fertilizer was optimal at higher carbon prices for medium and low forest product prices. Carbon payments had a greater impact on LEV than prices for wood utilized for bioenergy. Also, increase in the carbon price increased the optimal rotation

Highlights

To what extent woody bioenergy can be a viable strategy in reducing greenhouse gas (GHG)emissions is a debated topic among policymakers, society, and researchers [1,2,3]
Though the extent to which GHG emissions are reduced is very context specific, woody biomass utilized for energy is part of the biosphere and can eventually be recaptured by new forest growth—except for the relatively small amount produced by fuel consumed for management, harvesting, processing, and transporting [2]
The results show that in each of the management regimes at high, average, and low products prices, as expected, land expectation value (LEV) increased with an increase of carbon and bioenergy prices

Summary

Introduction

To what extent woody bioenergy can be a viable strategy in reducing greenhouse gas (GHG)emissions is a debated topic among policymakers, society, and researchers [1,2,3]. Forests related strategies to mitigate GHGs are highly influenced by the existence/non-existence of carbon and bioenergy markets modulated by market-based policy incentives in regulatory or voluntary markets. While analyzing the potential for using woody bioenergy for carbon mitigation, it is important to understand how landowners may change forest management practices in response to carbon and bioenergy markets. This is true in the southeastern United States as the majority of the supply for both carbon offsets and woody bioenergy will primarily come from private landowners. A life cycle assessment (LCA) is combined with a stand level economic model to understand the influence of carbon prices and stumpage prices for wood used as bioenergy (hereafter referred to as bioenergy prices) on the management of loblolly pine in the Coastal Plains of the southeastern United States

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Conclusion