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.

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