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Designing afforestation subsidies that account for the benefits of carbon sequestration: A case study using data from China's Loess Plateau
Institution:1. Research Center for Resource Economics and Environment Management, Northwest A&F University, Yangling, Shaanxi, China;2. Department of Medical Information Engineering, Zunyi Medical University, Zunyi, Guizhou, China;1. Jiangsu Provincial Academy of Environmental Science, 176 North Jiangdong Rd., Nanjing, Jiangsu, 210036, China;2. Air Quality Analysis Section, Environment Canada, 335 River Road, Ottawa, Ontario, K1A 0H3, Canada;3. Air Quality Processes Research Section, Environment Canada, 4905 Dufferin Street, Toronto, Ontario, M3H 5T4, Canada;4. Air Quality Modelling and Integration Section, Environment Canada, 4905 Dufferin Street, Toronto, Ontario, M3H 5T4, Canada;1. Universidad de Castilla-La Mancha, Instituto de Investigación en Energías Renovables, Albacete 02006, Spain;2. Universidad de Castilla-La Mancha, Escuela Técnica Superior de Ingenieros Industriales, Ciudad Real 13071, Spain;3. Instituto Nacional de Investigación y Tecnología Agraria y Alimentaria (INIA-CIFOR), Cª La Coruña km 7,5, 28040 Madrid, Spain;4. Iberdrola Renovables Energía S.A., C/Menorca 19, 46023 Valencia, Spain;1. China Institute of Atomic Energy, Beijing 102413, China;2. College of Physics Science and Technology, Shenzhen University, Shenzhen 518060, China;3. Department of Physics, Dongbei Normal University, Changchun 130024, China;4. School of Physics, State Key Laboratory of Nuclear Physics and Technology, Peking University, Beijing 100871, China;5. College of Physics, Jilin University, Changchun 130012, China;1. U.S. Geological Survey, Western Ecological Research Center, 21803 Cactus Ave., Suite F, Riverside, CA 92518, USA;2. U.S. Bureau of Land Management, California State Office, 2800 Cottage Way, Room 1928, Sacramento, CA 95825, USA;3. EREMICO Biological Services, 211 Snow St., Weldon, CA 93283, USA;1. Japan Atomic Energy Agency, 4002 Narita, Oarai, Higashi-ibaraki-gun, Ibaraki 311-1393, Japan;2. Japan Atomic Power Company Ltd., 1-1, Mitoshiro-chyo, Kanda, Chiyoda-ku, Tokyo 101-0053, Japan
Abstract:This paper presents a method for determining the subsidy required to motivate farmers to participate in timber afforestation programs designed to maximize social well-being. The method incorporates a carbon sequestration benefit function into the land expected value model in order to quantify the social benefit arising from carbon sequestration by the planted trees. This is used to calculate the optimal rotation age for newly planted forests that maximizes social utility. The minimum subsidy required to motivate farmers to participate in the afforestation program was calculated using a modified decision model that accounts for the subsidy's impact. The maximum subsidy offered by the government was taken to be the NPV of the carbon sequestration achieved by afforestation. Data on Robinia pseudoacacia L. trees planted on the Loess Plateau were used in an empirical test of the model, which in this case predicts an optimal subsidy of 254.38 yuan/ha over 40 years. This would guarantee the maintenance of forest on land designated for afforestation until they reached the socially optimal rotation age. The method presented herein offers a new framework for designing afforestation subsidy programs that account for the environmental service (specially, the carbon sequestration) provided by forests.
Keywords:Planting timber forest  Optimal subsidy  Optimal compensation period  Carbon sequestration benefit
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