Forests will have two notable economic roles in the future: providing renewable raw material and storing carbon to mitigate climate change. The pricing of forest carbon leads to longer rotation times and consequently larger carbon stocks, but also exposes landowners to a greater risk of forest damage. This paper investigates optimal forest rotation under carbon pricing and forest damage risk. I provide the optimality conditions for this problem and illustrate the setting with numerical calculations representing boreal forests under a range of carbon prices and damage probabilities. The relation between damage probability and carbon price towards the optimal rotation length is nearly linear, with carbon pricing having far greater impact. As such, increasing forest carbon stocks by lengthening rotations is an economically attractive method for climate change mitigation, despite the forest damage risk. Carbon pricing also increases land expectation value and reduces the economic risks of the landowner. The production possibility frontier under optimal rotation suggests that significantly larger forests carbon stocks are achievable, but imply lower harvests. However, forests' societally optimal role between these two activities is not yet clear-cut; but rests on the future development of relative prices between timber, carbon and other commodities dependent on land-use.

中文翻译：

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碳定价和森林破坏风险下的最优森林轮作

森林在未来将有两个显着的经济作用：提供可再生原材料和储存碳以缓解气候变化。森林碳的定价导致更长的轮作时间和更大的碳储量，但也使土地所有者面临更大的森林破坏风险。本文研究了碳定价和森林破坏风险下的最佳森林轮作。我为这个问题提供了最优条件，并用数值计算说明了在一系列碳价格和损害概率下代表北方森林的设置。损坏概率和碳价格之间的关系对于最佳轮换长度几乎是线性的，碳定价的影响要大得多。因此，尽管存在森林破坏风险，但通过延长轮伐期来增加森林碳储量是缓解气候变化的一种经济上有吸引力的方法。碳定价还提高了土地预期价值，降低了土地所有者的经济风险。最佳轮作下的生产可能性边界表明可以实现显着更大的森林碳储量，但意味着收成较低。然而，森林在这两项活动之间的最佳社会作用尚不明确；但取决于木材、碳和其他依赖土地使用的商品之间的相对价格的未来发展。最佳轮作下的生产可能性边界表明可以实现显着更大的森林碳储量，但意味着收成较低。然而，森林在这两项活动之间的最佳社会作用尚不明确；但取决于木材、碳和其他依赖土地使用的商品之间的相对价格的未来发展。最佳轮作下的生产可能性边界表明可以实现显着更大的森林碳储量，但意味着收成较低。然而，森林在这两项活动之间的最佳社会作用尚不明确；但取决于木材、碳和其他依赖土地使用的商品之间的相对价格的未来发展。