Continuous versus Discrete Time Forest Management Models with Carbon Sequestration Benefits

Forest literature uses both continous and discrete time models to study forest management problems, and when carbon sequestration benefits are considered, the results obtained in both approaches are not always equivalent. This issue is relevant from a policy point of view if credits are to be allocated to forest owners within the implementation of the Kyoto Protocol. This note explores the impact of different carbon sequestration accounting methods on both settings. It studies the specific conditions for optimal rotation period and the value of a marginal unit of bare land on a one stand model and compare them with the long run optimal stationary steady state of a forest vintage model.