Environmental impacts of sequestering carbon through forestation

An issue that arises when considering the potential damages of climate change is whether it is possible to slow or stop human caused climate change. One suggestion to reduce the threat of global warming is to change our management of forests to offset carbon emissions. This study examines the impacts of such a policy on environmental amenities in existing Douglas-fir forests. In this analysis Douglas-fir forest management is modelled in a Faustmann framework, where the forest produces three goods: timber, carbon sequestration and amenities. Using this framework, the level of amenities under profit-maximizing and carbon-sequestration management regimes are compared. The change in the level of seven specific amenities is modelled. These amenities include trout, wildlife diversity, visual aesthetics, soil stability, deer populations, elk populations, and water yield. The study finds that the effect of a carbon sequestration policy will depend on the discount rate chosen. In most situations externalities vary less than plus or minus ten percent. However, those externalities that exhibit discontinuities in their relationship to forest age may vary a hundred percent or more depending on the discount rate used.