Optimal rotation period ofPopulusplantations considering multiple carbon pools and carbon cap policies in Jiangsu, East China

Abstract

Forests provide wood biomass to produce various wood products while sequestering CO2 from the atmosphere. The joint benefits of wood production and carbon sequestration should be considered when making forest management decisions such as those related to optimal rotation periods. In this study, we extend the Faustmann model to consider the effects of timber value and the dynamics of forests’ multiple carbon pools (biomass, dead organic matter and long-period forest products) on the optimal rotation and the corresponding net present value (NPV). The theoretical framework also takes account of dynamic carbon prices and potential effects of carbon cap policies. We showcase our approach using Populus × euramericana “Nanlin895” as an example. This tree species is an important species for the planted forests in East China. The results show that: (1) multiple carbon pools increase the optimal rotation period by 4.76 per cent and the NPV by 45.66 per cent under the static carbon price scenario, (2) the tightening carbon cap facilitates carbon price variation and results in a significant increase in the NPV, while the optimal rotation period fluctuates between 8 and 10 years and (3) frequent cap policy adjustments shorten the optimal rotation period and lower the NPV even if the cap reduction target is achieved. Although the effect of carbon benefits on the optimal rotation period is small, the forest carbon trade mechanism could effectively enhance landowners’ income through the tightening carbon cap. These findings have significant policy implications for forest management. Highlights • We analyze the effects of multiple carbon pools on the optimal rotation period and the net present value. • We examine how carbon trade affects the management decision of Populus plantations. • Tightening the carbon cap promotes dynamic carbon price variation, benefiting landowners.