Forest biomass as carbon sink - Economic value and forest management/policy implications

Abstract

All countries in Scandinavia have introduced a carbon fee on fossil fuel to reduce the emission of the climate gas CO2. In Norway the fee is 0.82 NOK (or about 0.12 USS) per liter of gasoline, equivalent to 343 NOK (or 49 US$) per ton CO2. The fee is an emission cost which gives a corresponding benefit for absorbing atmospheric CO2 in forest biomass. This article shows that this benefit corresponds to a net economic value of carbon sequestration in forest biomass 2-30 times higher than the net value of timber as raw material for the forest industry in Norway, which has one of the highest timber prices in the world. If a fee high enough to stabilize the CO2 emission in Norway were to be introduced, the value of carbon sequestration will be at least twice as high as the above estimates. It is argued that this will imply substantial changes in forest management and policy, both in rich and poor countries. Projects to restore and maintain sustainable forest ecosystems will be very profitable, and could simultaneously provide considerable other environmental benefits like increased biodiversity, soil stability, and improved watershed structures.