Abstract
This study investigated the potential financial benefits that private forest famers can derive when participating in a larch carbon sink plantation project in the northwestern Chinese province of Gansu. A decision matrix was developed to help forest farmers justify participation in forest carbon sink projects relative to the traditional land-use goal of timber production under various carbon trading prices, site conditions, and contract terms. The results showed that when the carbon trading price is at the theoretically optimal carbon price (CNY 110/tCO2e, equivalent to USD 17/tCO2e), Chinese business entities are willing to pay for forest carbon credits under the current global carbon emissions level, and forest farmers who participate in a 25-year forest carbon sink plantation project on high-productivity sites would generate the greatest financial benefit compared with the net income from pure timber production forests. Thus, the government does not need to provide a carbon sink subsidy for participating tree farmers. However, at the current average carbon trading price (CNY 19.8/tCO2e or USD 3/tCO2e) in the domestic market, a minimum additional subsidy of CNY 735/ha (USD 113/ha) is required upfront to motivate forest farmers to convert timber production forests into carbon sink forests. The results of this study can help policymakers and forest managers formulate optimal eco-compensation strategies for enrollment in forest-based carbon sequestration programs.
Highlights
Published: 8 February 2022To mitigate the continued increases in carbon dioxide (CO2 ) and other greenhouse gases (GHGs) in the atmosphere, many countries and regions worldwide have set carbon (C)emission targets and abatement strategies to reduce their GHGs emissions
Our results show that the land expectation value (LEV) of C sink forests within the term of the C sink project are significantly less than the LEV of the timber production forest in the same period under the same site conditions
The generalized Faustmann model was applied as a decision-making tool to help private forest farmers in the northwestern Chinese province of Gansu evaluate the financial attractiveness of participating in a larch C sink plantation project relative to the traditional land-use goal of timber production
Summary
Published: 8 February 2022To mitigate the continued increases in carbon dioxide (CO2 ) and other greenhouse gases (GHGs) in the atmosphere, many countries and regions worldwide have set carbon (C)emission targets and abatement strategies to reduce their GHGs emissions. Because trees and forests can take CO2 and other GHGs from the atmosphere through photosynthesis and sequester it in biomass and soils, forests have played an important role in mitigating global climate deterioration [3,4]. Forest C sink plantation projects comprise C sequestration and trading programs, in which forest farmers can sell C credits (which is a permit allowing the holder to emit CO2 or other GHGs) to large emitters seeking to offset their CO2 emissions [6]. In this system, both parties are committed
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