Economic analysis of slash pine forest carbon sequestration in the southern U. S.

The impact of a carbon subsidy and tax policy on slash pine (Pinus elliottii) plantations is investigated using a modified Hartman model. Such a policy is shown to increase the optimal rotation age, land expectation value and the supply of sequestered carbon. The supply of carbon increases at a decreasing rate with the price of carbon. The supply of sawtimber increases while the supply of pulp-wood decreases. The increase in land expectation value was substantial, suggesting inclusion of carbon sequestration benefits and emission costs would benefit private forestland owners. As the value of forestland increases in response to a carbon policy, more land could be devoted to forestry as opposed to other land uses such as agriculture and urban development.