Current issue: 56(4)
Under compilation: 57(1)
The impact of carbon sequestration on the financial profitability of four tree plantation cases in Finland and the Philippines were examined. On the basis of stem wood growth; the accumulation of carbon in forest biomass, the formation and decomposition of litter, and the carbon flow in wood-based products were assessed for each reforestation case representing boreal (Finland) and moist tropical conditions (the Philippines). Using different unit values for carbon sequestration the profitability of reforestation was estimated for a fixed 100-year period on a per hectare basis. The financial profitability of reforestation increased notably when the sequestered carbon had high positive values. For example, when the value of carbon sequestration was set to be Twenty-five United States Dollar per megagram of carbon (25 USO/Mg C), the internal rate of return (IRR) of a reforestation investment with Norway spruce (Picea abies (L.) H. Karst.) in Finland increased from 3.2% to 4.1 %. Equally, the IRR of reforestation with mahogany (Swietenia macrophylla King) in the Philippines increased from 12.8% to 15.5%. The present value of carbon sequestration ranged from 39–48% and from 77–101% of the present value of the reforestation cost in Finland and the Philippines, respectively when a 25 USO/Mg C shadow price and a 5% discount rate were applied. Sequestration of one mg of carbon in reforestation in Finland and the Philippines was estimated to cost from 10.5–20.0 and from 4.0–13.6 USO, respectively.
The profitability of fast-growing trees (Eucalyptus camaldulensis Dehnh., Acacia mangium Willd. and Melia azedarach L.) was investigated in the north-eastern and eastern provinces of Thailand. The financial, economic, and tentative environmental-economic profitability was determined separately for three fast-growing plantation tree species and for three categories of plantation managers: the private industry, the state (the Royal Forest Department) and the farmers. Fast-growing tree crops were also compared with teak (Tectona grandis L. f.), a traditional medium or long rotation species, and Para rubber (Hevea brasiliensis (Willd. ex A. Juss.) Müll. Arg.) which presently is the most common cultivated tree in Thailand.
The optimal rotation for Eucalyptus camaldulensis pulpwood production was eight years. This was the most profitable species in pulpwood production. In sawlog production Acacia mangium and Melia azedarach showed a better financial profitability. Para rubber was more profitable and teak less profitable than the three fast-growing species. The economic profitability was higher than the financial one, and the tentative environmental-economic profitability was slightly higher than the economic profitability.
The profitability of tree growing is sensitive to plantation yields and labour cost changes and especially to wood prices. Management options which aim at pulpwood production are more sensitive to input or output changes than those options which include sawlog production. There is an urgent need to improve the growth and yield data and to study the environmental impacts of tree plantations for all species and plantation types.
The PDF includes a summary in Finnish.