Journal of Forest Economics > Vol 37 > Issue 4

Rising Carbon Price and the Paradoxes of Forest-based Sequestration

Colin Price, Colin Price Free-lance Academic Services, UK, , Rob Willis, Formerly of Moelyci Environmental Centre, UK
Suggested Citation
Colin Price and Rob Willis (2022), "Rising Carbon Price and the Paradoxes of Forest-based Sequestration", Journal of Forest Economics: Vol. 37: No. 4, pp 403-436.

Publication Date: 31 Oct 2022
© 2022 C. Price and R. Willis
Forest carbon sequestrationrising carbon pricessocial cost of carbonoceanic CO2 uptakesustainable forestryno-harvest forestrydelay


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In this article:
1. Introduction 
2. Carbon Pricing and Forestry 
3. Rising Price and Stylised Fluxes 
4. Rising Price and Realistic Fluxes 
5. Policy-based Prices and Discounting 
6. CO2 Price Based on the Rising Social Cost of Climate Change 
7. The Profile of Effects from Afforestation 
8. Deforestation, Fossil Fuels and Compensating Planting 
9. Possible Resolutions of the Paradoxes 
10. Discounting Our Way Out of Trouble – Or Into It? 
11. Modes of Analysis – The Source of the Problem? 
12. The Normal Forest Option 
13. The Repeating Cycles Option 
14. The No-Harvest Option 
15. The Value of Delay 
16. Conclusions 


Both supply and demand factors suggest that the price ascribed to a carbon flux into or out of the atmosphere might rise through time. When this is so, a single productive forestry cycle entails both early sequestration at low prices and late volatilisation at higher prices of carbon. Hence the cycle apparently has a negative carbon account, even if in every future time period its effect on atmospheric CO2 stock seems to be non-detrimental. Costing carbon via its lagged long-term effects on global conditions (atmospheric and oceanic CO2 and temperature) shows that a single production cycle which is overall carbon-neutral might indeed be detrimental. While the effect would be mitigated or reversed by discounting carbon flux values, in practice there is debate about whether such values should be discounted. Forest economists' habitual mode of analysis entails bias in treatment of the times within a forest cycle, and this is a cause of negative values. Combining carbon flux cycles into a normal forest structure, or a repeated replanting sequence, does produce a positive carbon account. Another option is growing a forest but not harvesting it. However, with rising carbon price and limited afforestable area, an even better alternative, apparently, is to delay any of these options, for as long as prices rise. To justify immediate planting would need other benefits of so doing to be invoked, or the case for rising prices to be rejected. Because of its long-term opportunity cost, such planting should complement emissions reduction, not be an offset that justifies emissions.