Abstract
Global climate change is a growing concern among many policy makers. This concern has led to substantial interest in using forests as one option to mitigate climate change. In this article, the effect of internalizing carbon sequestration benefits on the optimal management of slashpine plantations is explored. Results suggest that without carbon benefits, it is optimal to use herbicide and bedding but not fertilizer because the increase in timber yield does not justify the high cost of fertilizer. With carbon benefits, however, the use of fertilizer becomes profitable.Thus a carbon market would likely induce plantation owners to increase their management intensity, which may in turn also have significant impacts on the amount of carbon sequestered. For example, by allowing the management regime to vary in addition to rotation age, the amount of carbon sequestereddecreased from 204 to 164 metric tons of carbon per acre when carbon prices increased from $40 to $200 per metric ton. Thus increasing carbon sequestration on the intensive margin may be less feasible than previously supposed, but increasing on the extensive margin may be highlypracticable South. J. Appl. For. 29(1):27–32.