Exploring trade-offs in forest carbon storage: A cost-effectiveness study of Nordic forests and harvested wood products

Junhui Hu, Eirik Ogner Jåstad and Per Kristian Rørstad

Forest Policy and Economics, 2025, vol. 179, issue C

Abstract: Forest-based carbon sequestration plays an important role in climate mitigation, yet strategies vary widely in effectiveness and cost. This study compares two optimization goals in the Nordic forest sector, maximizing carbon in harvested wood products (HWP) and in avoided forest harvest plus HWPs. A partial equilibrium forest sector model (NFSM), combined with the method of Modeling to Generate Alternatives (MGA), is used to assess trade-offs between economic outcomes and carbon storage goals. Marginal abatement cost (MAC) curves are indirectly derived from the results. The analysis shows that maximizing avoided harvest and HWP achieves higher CO₂ gains at substantially lower costs (about €15–463/tCO₂) compared to only maximizing HWP (about €44–1200/tCO₂). In addition, the results reveal that carbon-focused strategies reshape industrial and trade dynamics in opposing ways. Bioeconomy-oriented approaches drive production and exports at higher carbon costs, while conservation-focused strategies reduce harvests and raise the risk of market leakage. These findings highlight the need for integrated policies that reduce reliance on product-based carbon storage while strengthening forest-based sequestration and storage.

Keywords: Carbon cost; MAC; Forest sector modeling; Harvested wood product (HWP); Model-to-generate-alternatives (MGA) (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:179:y:2025:i:c:s1389934125001984

DOI: 10.1016/j.forpol.2025.103619

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