How does carbon pricing impact optimal thinning schedules and net present value in Mediterranean pine plantations?

Acuña, Mauricio; Navarro-Cerrillo, Rafael M.; Ruíz-Gómez, Francisco J.; Lara-Gómez, Miguel A.; Pérez-Romero, Javier; Varo-Martínez, Ma Ángeles; Palacios-Rodríguez, Guillermo

doi:10.1016/j.foreco.2020.118847

Cited by 7 publications

(4 citation statements)

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“…For any C price, adding up the revenue from C credits and the sale of timber gave the best economic returns. High C prices increased the proportional contribution of C credits to NPV and reduced the contribution of timber, as found in previous studies [8][9][10]37]. Growth rates were used to compute C sequestered and stored in aboveground biomass, and a sensitivity analysis was conducted to quantify the effect of IR as well as C and timber prices on NVP and optimal harvest scheduling (including stands' harvest age).…”

Section: Discussionmentioning

confidence: 82%

“…However, the implementation of forest planning that includes C sequestration as a source of revenue in Eucalyptus plantations requires regulatory changes at the international and national level [36]. Optimizing harvest schedules and harvest age of stands considering C and timber prices is key to maximize the use of the forestry resources that are subject to intensive silviculture schemes [8]. The results show that NPVs were quite sensitive to the range of C prices evaluated in the study.…”

Section: Discussionmentioning

confidence: 90%

“…Globally, forest planners are concerned with the sustainability of planted forests. Strategies to increase C sequestration are under consideration by many forest owners and government agencies in their forest management and logging plans [8]. Linear programming economic models of forest management that include C sequestration in intensive Eucalyptus plantations are a powerful tool to optimize their role for climate change mitigation [45].…”

Section: Discussionmentioning

confidence: 99%

“…Optimizing harvest schedules in short-rotation plantations can increase C sequestration, which can result in increased economic returns and better adaptation of trees to climate change. Thus, C pricing can play an essential role in generating an additional revenue source and promoting adaptive silviculture [8]. C pricing in planning models may modify harvesting activities over vast geographical areas and within a very long planning horizon [9].…”

Section: Introductionmentioning

confidence: 99%

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Use of Optimization Modeling to Assess the Effect of Timber and Carbon Pricing on Harvest Scheduling, Carbon Sequestration, and Net Present Value of Eucalyptus Plantations

Hirigoyen

Acuña

Rachid-Casnati

et al. 2021

Forests

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Quantifying the impact of carbon (C) and timber prices on harvest scheduling and economic returns is essential to define strategies for the sustainable management of short-rotation plantations so that they can provide timber products and contribute to C sequestration. In this paper, we present a mixed-integer linear programming model that optimizes harvest scheduling at the forest level, C sequestration, and Net Present Value (NPV) over a planning period of up to 15 years. The model included revenue from the sale of timber (pulplogs) and credits from the net C sequestered during the life of the stands. In addition, plantation establishment, management, harvesting, and transportation costs were included in the analysis. The study area comprised 88 Eucalyptus grandis W. Hill and Eucalyptus dunnii Maiden stands located in Uruguay, totaling a forest area of nearly 1,882 ha. The study investigated the impact of C and timber prices on NPV, harvest schedules, stands’ harvest age, timber flows to customers, and C sequestered per period. The maximum NPV among all the scenarios evaluated (USD 7.53 M) was calculated for a C price of 30 USD t−1, an interest rate of 6%, and a timber price of 75 USD m−3. This was USD 2.14 M higher than the scenario with the same parameters but that included only revenue from timber. C prices also impacted stands’ harvest age, C sequestration, and timber flows delivered to end customers. On average, in scenarios that included C prices, timber flows and C sequestration increased by 15.4 and 12.1%, respectively, when C price increased from 5 to 30 USD t−1. These results demonstrate that harvest scheduling, harvest age, and NPV are very sensitive to C and timber, and that the best economic returns are obtained when the stands are managed to maximize timber production and C sequestration.

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Section: Discussionmentioning

confidence: 82%

Section: Discussionmentioning

confidence: 90%