Prakash Nepal, LSU Agcenter/US Forest Products Lab, pnepal@fs.fed.us (Presenter)
Peter Ince, , pince@fs.fed.us
Kenneth Skog, , kskog@fs.fed.us
Sun J. Chang, Louisiana State University, xp2610@lsu.edu


The implementation of future carbon policy and program allowing for carbon offset purchases can enhance forest sector carbon mitigation benefits by increasing forest land area dedicated to increased carbon sequestration. However, such policy and program will likely have serious economic impacts to the entire forest sector because of reduced timberland area and timber inventory available for conventional forest products. This study presents CO2 mitigation benefits and forest products market implications, over the next 50 years, of a hypothetical future carbon offset policy that would pay U.S. forest landowners for storing carbon in forests. A baseline (business-as-usual) scenario without any carbon policy is evaluated against an alternative scenario where timberland area is set aside permanently (100 years) as a carbon reserve. The impact of two hypothetical carbon price levels ($5 and $10/tCO2e)and two annual carbon expenditures ($1 and $3 billon) is evaluated in relation to the the quantity of sequestered carbon from the timber set asides, the available timberland area and timber inventory for harvests, changes in timber stumpage prices, and the costs of mitigations over the next 50 years. Keywords: carbon budget, set asides