Asante P FEMC2007

Stand Level Analysis of the Impact of Carbon Credit Trading on the Behaviour of a Forestry Firm

Patrick Asante, Department of Renewable Resources, University of Alberta, Edmonton, AB, T6G 2H1, Canada, pasante@ualberta.ca
Glen W. Armstrong, Department of Renewable Resources, University of Alberta, Edmonton, AB, T6G 2H1, Canada, gwa@ualberta.ca

Despite considerable interest in the potential for forests to sequester carbon, there is still a gap in knowledge when it comes to determining the impact of carbon credit trading on the behaviour of a forestry firm, as it relates to harvest levels, silvicultural practices and afforestation of agricultural lands. Managing forest for carbon budget may result in modifications to the way forests are managed in Canada depending on the incentives provided by carbon markets. This study uses a stand-level optimization model to investigate the response of a forestry firm to carbon sequestration. The knowledge gained through this research will enter into national policy discussions regarding carbon management, and will inform relevant agencies about how forestry firms might respond to different mechanisms that seek to encourage carbon sequestration. Results and methods from this study should give forestry firms the building blocks to develop strategic plans for managing their forest for carbon budget.