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Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration

Richard G. Newell and Robert N. Stavins

In this technical paper, the authors examine the sensitivity of carbon sequestration costs to changes in critical factors, including the nature of the management and deforestation regimes, silvicultural species, agricultural prices, and discount rates. They find, somewhat counter intuitively, that the costs of carbon sequestration can be greater if trees are periodically harvested, rather than permanently established. In addition, higher discount rates imply higher marginal costs, and they imply non-monotonic changes in the amount of carbon sequestered. Importantly, retarded deforestation can sequester carbon at substantially lower costs than increased forestation.

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