Economic analysis of slash pine forest carbon sequestration in the southern U. S.

The impact of a carbon subsidy and tax policy on slash pine (Pinus elliottii) plantations is investigat-ed using a modified Hartman model. Such a policy is shown to increase the optimal rotation age, land expectation value and the supply of sequestered carbon. The supply of carbon increases at a decreasing rate with the price of carbon. The supply of sawtimber increases while the supply of pulp-wood decreases. The increase in land expectation value was substantial, suggesting inclusion of car-bon sequestration benefits and emission costs would benefit private forestland owners. As the value of forestland increases in response to a carbon policy, more land could be devoted to forestry as opposed to other land uses such as agriculture and urban development.