Forest carbon markets in afforestation projects: differences across six schemes

In recent years, there has been an increase in the number of schemes and registries accepting afforestation projects for the purpose of obtaining carbon credits. However, from the perspective of a single non-industrial private forest landowner, it is unclear which scheme is the most economically viable and how it affects the planned forest rotation in the absence of carbon. This issue is addressed by analysing six different systems applied to two afforestation projects. It is demonstrated that for plantations where timber profitability is low, transaction costs associated with carbon can either improve profitability or render afforestation unviable until carbon prices reach a minimum threshold. The optimal rotation age varies slightly. In cases where plantations were already profitable, the variations are much smaller. The three most important systems in the voluntary carbon market underperform compared to national systems. This is mainly due to the carbon transaction costs associated with each system, meaning that owners must study them before deciding which to use. Generally, variations in the economically optimal rotation are slight, but this study has assumed a single possible silviculture focused on optimising timber production.