Carbon Sequestration in Forest Valuation

Kazak Jan (), Malczyk Jarosław (), Castro David Garcia () and Szewrański Szymon ()
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Kazak Jan: Department of Spatial Economy, Wrocław University of Environmental and Life Sciences
Malczyk Jarosław: Institute of Plant Genetics, Breeding and Biotechnology, University of Life Sciences in Lublin
Castro David Garcia: Department of Financial Economy II, University of the Basque Country
Szewrański Szymon: Department of Spatial Economy, Wrocław University of Environmental and Life Sciences

Real Estate Management and Valuation, 2016, vol. 24, issue 1, 76-86

Abstract: Strong links between the condition of the environment and the economy have recently resulted in a number of actions aiming to implement environmental considerations in economic calculations. This is accompanied by the development of the concept of ecosystem services, characterizing the benefits that the environment provides humankind with. The identification of these services is reflected in their economic values. Hence, the concept of the valuation of ecosystem services. Therefore, if the service provided by the environment takes on a financial value, we can consider it as income from the property containing the analyzed ecosystem. Of course, in order to speak in practice of the income approach in the valuation of such properties, there must be actual financial flow as income for the real estate owner. However, in the era of big economic changes and the implementation of a number of financial instruments (e.g., subsidies for a particular use of property, trade of CO2 emission rights), it seems reasonable to consider the possibility of property valuation by the valuation of ecosystem services.A part of this research focused on a service of forest ecosystems service that is carbon sequestration. The selection was made due to the implementation of the climate policy at the European level and its association with the trade of CO2 emission rights. The analyses were performed for two test sites characterized by different determinants (composition of species in the tree stand, age of the stand, degree of compactness of the tree stand, etc.). The low level of difficulty of the test methods used enables non-experts (persons with no qualifications in forestry) to carry out valuations themselves. The research is a contribution to the debate on the possibility of accounting for carbon sequestration in forest property valuation based on the income approach, but the issue still requires clarification of certain elements.

Keywords: forest; carbon sequestration; income approach (search for similar items in EconPapers)
JEL-codes: Q23 Q51 R58 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:24:y:2016:i:1:p:76-86:n:7

DOI: 10.1515/remav-2016-0007

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