Optimum cutting age for timber resources with carbon sequestration

Determining the optimum cutting age for timber resources has proved to be a very challenging problem for both economists and silviculturists. Based upon Samuelson's seminal work on this issue, the majority of economists have concluded that the optimum felling age occurs at a time when the net marginal benefits fall below the current rate of interest. Recently, concern about climate change has increased the importance of forestry projects, since trees act as natural biological scrubbers by removing CO2 from the atmosphere. By incorporating these carbon sequestration benefits, this paper re-determines the optimum cutting age using a multiple rotation model. The results of this reformulation show that, in afforestation projects, trees should remain in the ground longer than the period suggested by a timber-only model in order to absorb more CO2.