Capital Return Rate and Carbon Storage on Forest Estates of Three Boreal Tree Species

Petri P. Kärenlampi
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Petri P. Kärenlampi: Lehtoi Research, FIN-81235 Lehtoi, Finland

Sustainability, 2021, vol. 13, issue 12, 1-19

Abstract: In this study, the capital return rate and carbon storage on forest estates with three boreal tree species are discussed. A growth model is applied, along with verified yield models of sawlogs and veneer logs. Using the normal forest principle, thinning schedules and rotation ages maximizing the estate-level capital return rate are clarified. Regeneration expenses are amortized at the end of any rotation. Capitalizations are greater and rotations longer than in recent studies. The capital return rate is a weak function of initial stem count and rotation age but differs by tree species. The initial stem count strongly contributes to biomass stored in trees. Omission of thinnings increases carbon storage very effectively but requires financial compensation. The most promising way of increasing the capital return rate is the reduction of regeneration expenses. Thinnings are triggered by stand volumes of at least 200 m 3 /ha. The average commercial trunk volume of trees removed in thinnings always exceeds 200 L. Risk aversion theory proposes short rotations and low stem count in seedling planting unless carbon storage compensation exists. Even a small carbon storage compensation justifies increased seedling counts and extended rotations.

Keywords: capital return rate; carbon storage; carbon rent; rotation age; seedling density; thinning schedule (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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