Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration

41 Pages Posted: 12 Dec 2000

See all articles by Richard G. Newell

Richard G. Newell

Duke University - Nicholas School of Environment; National Bureau of Economic Research (NBER); Resources for the Future

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

Date Written: November 1999

Abstract

The possibility of encouraging the growth of forests as a means of sequestering carbon dioxide has received considerable attention because of concerns about the threat of global climate change due to the greenhouse effect. In fact, this approach is an explicit element of both U.S. and international climate policies, partly because of evidence that growing trees to sequester carbon can be a relatively inexpensive means of combating climate change. But how sensitive are such estimates to specific conditions? We examine the sensitivity of carbon sequestration costs to changes in critical factors, including the nature of the management and deforestation regimes, silvicultural species, agricultural prices, and discount rates. We find, somewhat counter-intuitively, that the costs of carbon sequestration can be greater if trees are periodically harvested, rather than permanently established. In addition, higher discount rates imply higher marginal costs, and they imply non-monotonic changes in the amount of carbon sequestered. Importantly, retarded deforestation can sequester carbon at substantially lower costs than increased forestation. These results depend in part on the time profile of sequestration and the amount of carbon released upon harvest, both of which may vary by species, geographic location, and management regime, and are subject to scientific uncertainty.

Suggested Citation

Newell, Richard G. and Stavins, Robert N., Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration (November 1999). Available at SSRN: https://ssrn.com/abstract=253814 or http://dx.doi.org/10.2139/ssrn.253814

Richard G. Newell

Duke University - Nicholas School of Environment ( email )

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Resources for the Future ( email )

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Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

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Resources for the Future

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National Bureau of Economic Research (NBER) ( email )

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