Date of Award
2020
Document Type
Open Access Master's Thesis
Degree Name
Master of Science in Applied Natural Resource Economics (MS)
Administrative Home Department
College of Business
Advisor 1
William S. Breffle
Committee Member 1
Jenny Apriesnig
Committee Member 2
Brian D. Barkdoll
Abstract
Tree plantations in developing countries are mostly driven by private sectors, mainly to increase forest cover and meet the timber demand. However, research studies on tree plantations in Laos, for instance, show that despite high profitability tree farmers and private companies face many challenges such as low timber quality, low timber selling price and slow plantation expansion. These challenges could be the result of slow policy improvement processes or the lack of basis on the justification of government intervention. This study uses a policy decision tool - a cost-benefit analysis to evaluate social costs and social benefits from private tree plantations by considering the market and non-market values. Among various non-market values from tree plantations, carbon sequestration is selected. The goal of this study is to demonstrate how the value of non-market benefits can shape environmental policy in developing countries. Given data limitations, the study was conducted based on the best existing data possible, using a combination of qualitative and quantitative analysis. The benefits of carbon sequestration in monetary value are obtained. A dual-discounting approach was applied to discount future net benefits of market and non-market components to arrive at a present value. The result of the study can be used as a basis to accelerate government intervention for private tree plantation investments. It was found that the benefit value of carbon sequestration in 2020 dollars was estimated to be $472.8 million over 30 years of tree plantation. This value can translate into the budget for government intervention to improve current tree plantation practices and regulations, increasing profitability for tree growers and eventually increasing tree planting in Laos. Further research to improve the results of this study is also discussed.
Recommended Citation
Vongsikeo, Vongdalone, "The Value of Carbon Sequestration in the Developing World: Making the Economic Case for Tree Planting in Laos", Open Access Master's Thesis, Michigan Technological University, 2020.