Potential Impacts of Afforestation Expansion Under Price Fluctuations of Carbon and Timber

Abstract

AbstractTaiwan, a non-contracting party to the UN Framework Convention to Climate Change, committed to Net-zero Emission goal by 2050. In implementing carbon trade schemes, forest landowners can acquire carbon credit revenue in addition to timber revenue. To assess the impacts on afforestation area in Taiwan, this study uses land expectation value (LEV) calculated from price of timber sale and carbon trading and analyzes the correlation with area of afforestation. Results indicate that timber price significantly affected the area of afforestation of Taiwania cryptomerioides (Taiwania). It suggests that to increase the afforestation by 1%, $${\text{LEV}}_{\log }^t$$ LEV log t must increase by an average of 100,261 NTD/ha. After conversion, the price of Taiwania increased by 240 NTD/m3 or 1.23%. The average carbon credit revenue accounts for less than 3% of the total LEV. It suggests that total LEV obtained from Taiwania is primarily determined by timber price, with minimal impacts from carbon price fluctuation.