Faustmann and the Climate

Michael Hoel (), Bjart Holtsmark and Katinka Holtsmark ()
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Katinka Holtsmark: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

No 26/2012, Memorandum from Oslo University, Department of Economics

Abstract: This paper presents an adjusted Faustmann Rule for optimal harvest of a forest in the presence of a social cost of carbon emissions. A contribution of the paper is to do this within theoretical and numerical frameworks that take account of the dynamics and interactions of the forest’s multiple carbon pools within an in…nite time horizon model. With our less restrictive assumptions we …nd that a social cost of carbon has a signi…cantly stronger e¤ect on the optimal harvest age than found in earlier studies. Considered is also how increased use of harvest residues for energy purposes and storage of carbon in building materials and furniture should in‡uence the length of the rotation period. The theoretical results are quanti…ed within a numerical framework.

Keywords: climate; forestry; biofuels; Faustmann; carbon (search for similar items in EconPapers)
JEL-codes: Q23 Q42 Q54 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-09-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Faustmann and the climate (2014)
Working Paper: Faustmann and the Climate (2012)
Working Paper: Faustmann and the Climate (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:osloec:2012_026

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