On the economics of Norway spruce stands and carbon storage

Abstract

We combine a process-based growth model for even-aged Norway spruce (Picea abies (L.) Karst.) with economics and optimization. Carbon storage is subsidized based on stand growth and product decay. We include detailed optimized thinnings and timber quality features and present cost functions for stand-level CO2 storage. In contrast to earlier studies, our results suggest that changing thinning strategies and postponing thinnings are at least as important as lengthening the rotation period when considering economically efficient carbon storage. The role of thinning is most important in less fertile sites. Contrary to the generic Faustmann model, a higher interest rate increases rotation length on our fertile site. Including carbon release from decaying timber products as reductions from carbon subsidies only has minor effects on optimal solutions. The fertile site stores more discounted carbon. However, with a 1% interest rate, the less fertile site is cost-efficient up to 13 CO2 t·ha−1, and with a 3% interest rate, it is cost-efficient up to 14 CO2 t·ha−1. After these points, carbon storage on the fertile site becomes cheaper. The economic costs of carbon storage suggest that it is optimal to apply carbon storage in Norway spruce forests to meet greenhouse gas reduction commitments.