Estimating Stand-Level Carbon Supply Curves for Loblolly Pine and Douglas-Fir Plantations

We estimate the carbon sequestration supply curve at the stand level based on the optimal rotation decision and conduct a marginal analysis for payments necessary for postponing harvest for additional 1-year increments of two commercially important species in the United States, loblolly pine and Douglas-fir. Under certain costs, production and timber prices assumptions, payments ranged from $62.23 ($26.97-$105.87) ac/yr. for loblolly pine plantations and $399.17 ($189.80-$628.72) ac/yr. for Douglas-fir plantations. Our results indicate that higher carbon sequestration occurs with higher site index, higher trees per acre, and in unthinned stands. Significant variability within and between species was heavily dependent on the number of years that final harvest was postponed. In addition, we show the effect of prices on the quantity supplied under multiple silvicultural treatments. The study should assist willing forest landowners and potential partners to determine initial reservation prices for carbon sequestration and temporary provision for a 1-year period in line with programs offering this contracting mechanism. Study Implications: One approach to sequestering carbon in forests above ground is to postpone timber-harvesting operations, therefore accumulating standing carbon for an additional period. Remuneration above the financial minimum necessary for postponement alters forest management decision-making at the stand level, and therefore potentially economic and ecological patterns if adopted at large scales. One new carbon offset program is currently available that provides an annual payment to forest landowners enrolled in the program. The methodology used in this study will allow landowners and forest stakeholders to value the necessary payment for postponing harvest for multiple 1-year periods past the financially optimal age for final harvest. These results are sensitive to site index, trees per acre, and whether the stand had an intermediate thinning.