This dissertation examines how carbon storage in forests may be increased by changing forest management at the stand level. To extend the economics of forest carbon storage beyond single-species even-aged stands, this dissertation develops a bioeconomic model framework that incorporates the internal structure of the stand, and the optimal choice between continuous cover forestry and forestry based on clearcuts. The studies apply empirically estimated growth models for boreal conifer and broadleaf tree species.
The first article presents an analytically solvable economic model for timber production and carbon storage. Continuous-time optimal control theory is utilized to solve the thinning path and the potentially infinite rotation age: if no optimal finite rotation age exists, thinnings are performed indefinitely while maintaining continuous forest cover. The second article extends this model by applying a size-structured growth model for Norway spruce, a detailed description of revenues and costs, and several carbon pools. The timing and intensity of thinnings, the rotation age, and the management regime are optimized numerically. In the third article, the optimization approach of the second article is extended to mixed-species size-structured stands. Species mixtures include the commercially valuable Norway spruce and birch, and other broadleaves (e.g. Eurasian aspen and maple) that have no market value.
Optimal rotation age is shown to either increase or decrease with carbon price depending on interest rate and the speed of carbon release from harvested wood products. Given empirically realistic assumptions, carbon pricing increases the rotation period and eventually causes a regime shift from rotation management to continuous cover management. Hence, carbon pricing heightens the importance of determining the management regime through optimization.
Optimal thinnings are targeted to the largest size classes of each tree species. Carbon pricing postpones thinnings and increases the average size of harvested and standing trees. Without carbon pricing, commercially non-valuable other broadleaves are felled during each harvesting operation. When carbon storage is valued, some of the other broadleaves are retained standing until they are large, thus increasing tree species diversity and deadwood quantity.
The results suggest that moderate carbon price levels increase timber yields, especially of sawlog. Increasing carbon storage through changes in forest management is shown to be relatively inexpensive, and the marginal abatement cost is the lower, the higher the number of tree species in the stand.