OPTIMAL TIMBER ROTATION LENGHTS IN EUCALYPTUS PLANTATIONS INCLUDING REVENUES FROM CARBON CAPTURE IN OAXACA, MÉXICO

Abstract

We examined the effect of a carbon sequestration market on optimal economic rotation lengths for Eucalyptus grandis Hill ex Maiden and E. urophylla S. T. Blake plantations in northeastern Oaxaca, México. Net present value and optimal rotation length were both determined with and without carbon sequestration revenues for stands under two site indices and two product scenarios: 1) pulpwood; and 2) sawlogs and pulpwood. Using a discount rate (r) of 4.5 %, we considered plantation establishment costs (Co) of $ 4123 ha^-1, a carbon price (cp) of $ 31 (t CO_2e)^-1, a sawtimber price of $ 600 m^-3, and a pulpwood price of $ 211 m^-3. A subsequent sensitivity analysis examined the effect of increasing the value of r, Co and cp in intervals of 2 %, $ 2000 ha^-1 and $ 21 (t CO_2e)^-1, respectively. Optimal harvest ages considering timber revenues only, varied from 83 to 108 months under scenario 1, and from 108 to 163 months under scenario 2, depending on species and site index. When revenues from carbon sequestration are considered, optimal rotation lengths are extended 12 to 20 months under scenario 1, and 17 to 30 months under scenario 2. The addition of a carbon market increases net present value and benefit-cost ratio under the extended rotations, although profitability is insignificant in the last criterion.