Optimal Forest Management with Carbon Sequestration Credits and Endogenous Fire Risk

Adam Daigneault (), Mario Miranda () and Brent Sohngen

Land Economics, 2010, vol. 86, issue 1, 155-172

Abstract: We use a stochastic dynamic profit maximization model to investigate the effects of forest carbon sequestration credits on optimal forest management practices for stands facing wildfire risk. Landowners that periodically thin a stand can increase growth rates and mitigate loss of timber and carbon stocks from wildfire. Results indicate that thinning and shortening rotations are cost-effective strategies to mitigate wildfire risk. Carbon prices cause landowners to delay both their thinning treatments and the final rotation age. Thinning and extending timber rotations are thus a viable climate-change mitigation option even when stands are susceptible to risks of fire.

JEL-codes: Q23 Q54 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (29)

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