RT Journal Article
SR Electronic
T1 Optimal Forest Management with Carbon Sequestration Credits and Endogenous Fire Risk
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 155
OP 172
DO 10.3368/le.86.1.155
VO 86
IS 1
A1 Adam J. Daigneault
A1 Mario J. Miranda
A1 Brent Sohngen
YR 2010
UL http://le.uwpress.org/content/86/1/155.abstract
AB 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 Q23, Q54)