Carbon pricing through subsidy payment for thinning activities in Japan

Author

Atsushi Yoshimoto

Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, 8-11, issue 41

Abstract: Carbon pricing was conducted through the subsidy payment for thinning activities in Japan within the optimization framework for the forest stand management. The optimal forest stand management model called DP-KYSS (dynamic programming model for Kyushu stand simulator) was utilized for the analysis of a sugi (Cryptomeria japonia) forest stand in the Kyushu region, Japan. The analyses showed that the thinning subsidy activated thinning activities with the reduction of carbon sequestered in a forest stand. Considering subsidies as a compensation for carbon loss by thinning, the evaluation of carbon showed that the present net value of cost per unit carbon loss became the highest for the rotation age of 35 years and the minimum for the rotation age of 50 to 65 years dependent upon the subsidy measure. At the rotation age of 100 years, the present net value of cost per unit carbon loss was found to be 44.56 to 110.13 Euro/Ct. The analyses showed that lengthening the period for subsidy would reduce the value of carbon. Subsidy pays more with more thinning reducing carbon sequestered in a forest stand.

Keywords: Carbon evaluation; carbon pricing; thinning subsidy; dynamic programming; calculus of variation; Environmental Economics and Policy; International Development (search for similar items in EconPapers)
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