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The Economic Value of Carbon Sequestration by our Nation’s Forests

Old growth stand of eastern white pine, eastern hemlock, and northern hardwoods in Michigan, USA .  USDA Forest Service photo by Steven Katovich

Director's Choice
A Minute with the Scientist

Bob Haight: I didn’t know what to expect at the beginning. I actually thought, maybe, that fire prevention would be really good because, I kind of felt like, well if you can prevent these forest fires, I thought maybe it would thereby reduce the emissions into the atmosphere, and I thought that would have the biggest bang for the buck. But it turns out that, no, that's not the case, that a widespread program of incentivizing farmers to plant trees is more effective. And, it is so because once you regenerate a forest — or plant a forest — the carbon sequestration over time is huge, and there's huge areas of marginal agricultural land that could be enrolled in that kind of program.

I'm Bob Haight, I'm a forest economist with the USDA Forest Service Northern Research Station located in Saint Paul, Minnesota. I’ve been working with a team of scientists around the country on estimating the present value of carbon sequestration in U.S. forests, and this project has been going on for the last three to four years.

One thing that I learned from this project is what the social cost of carbon means. It represents the damages that would happen for every additional ton of carbon emitted into the atmosphere. And so, what people have done, is they've tried to estimate the damages worldwide that result from climate change — and that's a huge problem. And yet, you know, the best work is they've tried to quantify what the damages are for climate change and get it down to a cost per ton of carbon emitted. And so, that kind of brought home to me the idea that climate change is real, that there's real economic damages associated with climate change, and they can be quantified in terms of a dollar per ton of carbon. And then, you know, on the positive side, if we can reduce emissions or increase sequestration, there's an economic benefit associated with doing that by avoiding the damages that are caused by climate change. And I think that is a really, really useful concept to explain to people.

Forests in the United States sequester 5 to 10 percent of the Nation’s carbon emissions each year. Forest Service researchers working with the USDA Office of the Chief Economist estimate that carbon sequestration by U.S. forests (private and public) will be worth over $100 billion over the next 35 years, making carbon sequestration one of the most valuable ecosystem services that forests provide. The most cost-effective ways to boost carbon sequestration are to invest in the reforestation of chronically understocked public lands in the western United States and to offer afforestation incentives to rural landowners in the eastern United States.

Choosing policy alternatives for increasing carbon sequestration in U.S. forests will depend on the benefits of various sequestration strategies, and research developed by USDA Forest Service scientists delivers methods for evaluating those benefits. Scientists used Forest Service Forest Inventory and Analysis (FIA) data to project carbon sequestration in the coterminous 48 states in a baseline scenario and three policy scenarios for 2015-2050. Alternatives included: 1) a land-use policy to reduce deforestation from development; 2) an afforestation policy targeting rural landowners in the eastern United States and a reforestation policy targeting understocked federal forest lands in the western United States; and 3) a policy reducing the area of stand-replacing wildfires. Next, scientists used estimates of the social cost of carbon to estimate the present value of carbon sequestration. Finally, the gains in the present value of carbon benefits associated with each policy were computed. Results suggest that, under the baseline scenario, the present value of sequestration in U.S. forests through 2050 is $125.5 to $806.7 billion, depending on the discount rate. Changes in policy to boost sequestration through afforestation and reforestation would provide the greatest marginal increase in carbon benefits ($21.4 to $147.1 billion). Rough estimates of the afforestation subsidy and regeneration costs necessary to implement this policy suggest that total policy costs would be a fraction of the sequestration benefit. Future analyses could evaluate additional policy costs, as well as costs and benefits of affected ecosystem services such as water quality, wildlife habitat, and biodiversity.



Research Partners

External Partners

  • Randy Bluffstone, Portland State University
  • Katherine Zook, USDA Office of the Chief Economist
  • Steve Polasky, University of Minnesota