RESTORING SUSTAINABLE FORESTS ON APPALACHIAN MINED LANDS FOR WOOD PRODUCTS, RENEWABLE ENERGY, CARBON SEQUESTRATION, AND OTHER ECOSYSTEM SERVICES Page: 22 of 28
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-Q(teit - eit--
V ! ( t-tc0 + Ja[L (z)]e-Zdz, I -V fJa[L (z)]e IzdzI
(1-e ) 0 0
+ f b[L (z)]e Zdz - f b[Lo (z)]e zdz > 0
Net discounted revenues of timber harvesting in this calculation could be positive or
negative, depending on conversion and regular reforestation costs, prices, interest rates and
timber volumes produced. Annual revenues and non-market benefits may differ from pre-
reforestation values, due to differing land attributes (Lf v. Lo), though it is difficult to imagine
these annual values not increasing when the land is reforested. It should be noted that a major
component of our calculation is the conversion cost co in (4) and (7) above. This undiscounted
cost must be paid up front, at the time of reforestation, without any offsetting revenues until the
timber reaches maturity in t years. Hence, it is likely to play a major role in determining
landowner welfare and, ultimately, the likelihood of reforestation occurring.
A potential market opportunity that can make conversion from grasslands to forests
financially viable is revenue that could be provided through payments made to landowners for
the carbon that is sequestered on these lands, which we examine using our landowner decision
framework above. Extensive study has been directed toward the question of the cost of
sequestering carbon through forest establishment in a variety of land-use situations, though not
directly on previously reclaimed mine lands (examples include Moulton and Richards 1990,
Adams et al. 1993, Hoen and Solberg 1994, Parks and Hardie 1995, Sedjo et al. 1995, Plantinga
et al. 1999, and van Kooten et al. 2000). In the context of our study, rather than asking how
much it would cost to sequester carbon on reclaimed mine lands, we ask how much carbon
would have to be worth to make forest conversion viable. As before, we consider both the
payment for carbon that would be required for a minimal level of profitability of forestry on
these lands (LEV > 0), and the payment required to provide a full reimbursement of the costs of
To determine the level of carbon payment required for a minimal level of profitability from
forestry, we set the LEV of forestry plus carbon production equal to zero, and solve for sc in:
r(Lf) _t - c +sC fx(z)-IZdz = 0 (8)
(1-e- ) 0
where x(z) is the level of carbon produced on the forested site, which is a function of the volume
of timber on the site at a given time plus carbon sequestered in the soil.
Similarly, to determine the level of payment for carbon that would provide for a full
reimbursement of reforestation costs, LEV of forestry plus carbon are set equal to the LEV of
forestry without conversion costs, and sc' is computed in:
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Burger, James A.; Galbraith, J.; Fox, T.; Amacher, G.; Sullivan, J. & Zipper, C. RESTORING SUSTAINABLE FORESTS ON APPALACHIAN MINED LANDS FOR WOOD PRODUCTS, RENEWABLE ENERGY, CARBON SEQUESTRATION, AND OTHER ECOSYSTEM SERVICES, report, November 29, 2004; United States. (https://digital.library.unt.edu/ark:/67531/metadc780576/m1/22/?rotate=90: accessed May 19, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.