The impact of carbon trade on the management of short-rotation forest plantations

Abstract

We extended the Hartman model to examine the optimal rotation, taking into consideration the economic benefits of wood and the dynamics of three carbon pools (aboveground biomass, dead organic matter, and harvested forest products). Chinese fir (Cunninghamia lanceolata) stands in Southern China were taken for a numerical example to analyze the effects of carbon price on the optimal management of short-rotation plantations. The results show that, with the current price of carbon, introducing the effects of harvesting on different carbon pools into the decision model would increase the optimal rotation age on poor (SI=10) and medium (SI=17) sites by one year, while it does not have any impact on the optimal rotation for good sites (SI=21). Irrespective of site condition, the optimal rotation age is not sensitive to carbon price and interest rate. An increase in interest rate by 1% would reduce the optimal rotation age by one year. In conclusion, forest carbon trade could effectively enhance land owners' income from short-rotation forest plantations. However, it does not lead to any significant increase in forest carbon sink.