Carbon Balance and Management(5)

All symbols in the following equations are explained inthe section "Abbreviations".

Net present value of forestry

The net present value of forestry is determined by theplanting costs, the harvestable wood volume, the wood-price and benefits from carbon sequestration.

Figure 8Expenditure until 2100 for different Incentive pay-ment Strategies. Incentives... Periodic payments for stand-ing biomass, All... Payments are done, without considering the effectiveness of the payment, in all regions, Region... Payments are done in regions where the payments protect forest against deforestation, Affected... Payments are done for for-ests where the payments protect them against deforestation.

For existing forests which are assumed to be under activemanagment the net present value of forestry given multi-ple rotations (Fi) over the simulation horizon is calculatedfrom the net present value for one rotation (fi) (equation1). This is calculated by taking into account the plantingcosts (cpi) at the begin of the rotation period and theincome from selling the harvested wood (pwi·Vi) at theend of the rotation period. Also the benefits from carbonsequestration are included denoted as (Bi).

The planting costs (eq. 3) are calculated by multiplyingthe planting costs of the reference country (cpref) with aprice index (pxi) and a factor which describes the share ofnatural regeneration (pri). The ratio of plantation to natu-ral regeneration is assumed to increase with increasingyield for the respective forests (eq. 4). The price index (eq.5) is calculated using the purchasing power parity of therespective countries. The stumpage wood price (eq. 6) iscalculated from the harvest cost free income range ofwood in the reference country. This price is at the lowerbound when the population density is low and the forestshare is high and at the higher bound when the popula-tion density is high and the forest share is low. The priceis also multiplied with a price index converting the pricerange from the reference country to the examined country.The population-density and forest-share was standardized

These two values are compared against each other anddeforestation is subsequently predicted to occur when theagricultural value exceeds the forest value by a certainmargin. When the model comes to the result, that defor-estation occurs, the speed of deforestation was constraintby estimates given by equation (24). The speed of defor-estation is a function of sub-grid forest share, agriculturalsuitability, population density and economic wealth ofthe country.

Figure 9

Removed Biomass without a carbon price. Green areas show grids where nowadays forests can be found. Red areas

indicate grids where deforestation will occur in a scenario without carbon prices.