Effects of Forest Carbon Sequestration on Optimum Planting Density Available to Purchase

In this study, the effects of the benefit of forest carbon sequestration on the optimal planting density for Scots pine plantation are analyzed. Analyses are performed by integrating the carbon benefit into the Faustmann framework, and then solving the integrated formulation. The benefit of carbon sequestration is measured by the Swedish CO₂ tax. Numerical results suggest that 1) forest owners prefer a high planting density as the benefit of carbon sequestration is included into forest management, and the increase in optimal planting density depends on the level of the CO₂ price; 2) the effect of carbon benefits on the optimal planting density is relatively greater on low productive sites than on high productive sites, others being equal. This is also true with respect to benefit gains in present value; and 3) the forest carbon benefit has a relatively larger effect when the interest rate is high than when it is low, others being equal. This is true with respect to benefit gains in present value as well.