Influence of Carbon Sequestration in an Optimal Set of Coppice Rotations for Eucalyptus Plantations

Abstract

The coppice regeneration method used to manage eucalypts leads to a simultaneous optimization problem: the manager has to simultaneously define the optimal age in each coppice rotation and the optimal number of coppice rotations for each plantation full cycle. The dynamic nature of the problem justifies the use of methods like dynamic programming in order to achieve optimal solutions. Expected land value and the duration of the optimal rotation may change significantly when payments for carbon sequestration are added as revenues in the cash flow analysis of the project. In this chapter, we analyze the effects of considering carbon sequestration as a subsidized complementary product when defining the optimal set of coppice rotations. A Monte Carlo simulation technique was used to model the inherent risk of some variables and parameters like pulpwood price, carbon price, and discount rate. The variation in the land expectation value and in the optimal rotation length is reported when these stochastic variables are computed. Two study cases are shown, one with Eucalyptus urophylla S.T. Blake in Brazil, and another with Eucalyptus globulus Labill in Galicia, Spain.