Cost-effectiveness analysis of subsidy schemes for industrial timber development and carbon sequestration in Japanese forest plantations

Abstract

This study uses simulations to investigate the effects of implementing two different Japanese forestry subsidy systems on timber production and carbon stock, and examines the consequences for harvesting strategies. An existing Local Yield Table Construction System (LYCS), a wood conversion algorithm, and a harvesting cost model were used in the simulations to test the applicability of different subsidies to the thinning of stands. Using forest inventory data collected by local government staff, simulation output was used to calculate forestry profits, carbon stocks, subsidies, the amount of labor required, and the cost effectiveness of investing in subsidies. By comparing the output of simulations based on two scenarios, we found that both the clear-cutting area and the amount of harvested timber were larger under Scenario 2, in which the rules governing subsidy allocations are more relaxed, than under Scenario 1, in which the rules are more restrictive. Because the harvested timber under Scenario 1 was mainly produced by clear-cutting, the forestry profits and the subsidy predicted in the early period of the simulation, were larger under Scenario 1 than under Scenario 2. In contrast, the carbon stock was larger under Scenario 2 than under Scenario 1. The simulation model is likely to be useful for improving Plan-Do-Check-Act cycles Foundation project:

A method to maximise forest profitability through optimal rotation period selection under various economic, site and silvicultural conditions

“…Variables previously found to have significant effects on forestry profitability (Nakajima et al 2011a) were used to define a design space of variables for calculating and displaying profitability (expressed as SEV), after which data from the cited study were used to estimate the variables' SEV contribution indices. The effects of the important factors for forestry profitability were then analysed and visualised as described below.…”

“…The site used in this study, located by Morotsuka village in the Miyazaki Prefecture, Japan, has been studied in previous research that includes a detailed forest inventory (Nakajima et al 2011a).…”

“…Dimensions of the design space were constructed from previously published forestry inventory data (Nakajima et al 2011a) and consisted of two stand condition factors (site index class and stand age), three site condition factors (area, and distances from forest road and strip road; referred to as ground condition variables in the previous study), one economic condition factor (discount rate) and one silvicultural planning factor (rotation period) as shown in Table 1. In this study, discount rate reflects the interest rate that is used to estimate the present value of future cash flows (Eatwell et al 1987;Winton 1951).…”

Case Study of the Effects of the Japanese Verified Emissions Reduction (J-VER) System on Joint Forest Production of Timber and Carbon Sequestration

“…In other words, Cryptomeria japonica, which is the target tree species in this study, is the most common tree species in Japanese planted forests (Forestry agency, 2007), so the work is applicable to other parts of Japan. In addition, the growth prediction system used in this study has been applied to the main tree species that grow throughout Japan (Nakajima et al, 2010;2011a), so this methodology could also be applied to other areas of Japan. Sakata (2005) estimated the effect of the carbon market on the forestry profits based on standard silvicultural practices and costs over a large area including the southeastern United States.…”

“…Sakata (2005) estimated the effect of the carbon market on the forestry profits based on standard silvicultural practices and costs over a large area including the southeastern United States. Although we considered a standard silvicultural system and costs (Nakajima et al, 2011a) in the present study, we made use of real age distribution and site index data for the study site, which is representative of much of the Japanese planted forest area (The Tokyo University Forests, 2006). We, thus, consider our results to be generally applicable across Japan.…”