Forest carbon benefits, costs and leakage effects of carbon reserve scenarios in the United States

Abstract

This study evaluated the potential effectiveness of future carbon reserve scenarios, where U.S. forest landowners would hypothetically be paid to sequester carbon on their timberland and forego timber harvests for 100 years. Scenarios featured direct payments to landowners of $0 (baseline), $5, $10, or $15 per metric ton of additional forest carbon sequestered on the set aside lands, with maximum annual expenditures of $3 billion. Results indicated that from 1513 to 6837 Tg (Teragrams) of additional carbon (as carbondioxide equivalent, CO₂e) would be sequestered on U.S. timber-lands relative to the baseline case over the next 50 years (30–137Tg CO₂e annually). These projected amounts of sequestered carbon on timberlands take into account projected increases in timber removal and forest carbon losses on other timberlands (carbonleakage effects). Net effectiveness of carbon reserve scenarios interms of overall net gain in timberland carbon stocks from 2010to 2060 ranged from 0.29 tCO₂e net carbon increase for a paymentof $5/tCO₂e to the landowner (71% leakage), to 0.15 tCO₂e net carbon increase for a payment of $15/tCO₂e to the landowner (85%leakage). A policy or program to buy carbon credits from landowners would need to discount additions to the carbon reserve by the estimated amount of leakage. In the scenarios evaluated, the timber set-asides reduced timberland area available for harvest up to 35%and available timber inventory up to 55%, relative to the baseline scenario over the next 50 years, resulting in projected changes in timber prices, harvest levels, and forest product revenues for the forest products sector.

Keywords

Forest carbon, Carbon reserve, Carbon price, Carbon leakage, Climate change mitigation, Mitigation cost, Present value, Set asides

Citation

Nepal, Prakash; Ince, Peter J.; Skog, Kenneth E.; Chang, Sun J. 2013. Forest carbon benefits, costs and leakage effects of carbon reserve scenarios in the United States. Journal of Forest Economics 19: 286-306.