LAUSR

We extend the study of economically optimal carbon storage to a previously unexplored forest type, mixed-species size-structured stands. The ecological model applied in the study is a transition matrix model with growth functions for boreal Norway spruce (Picea abies (L.) Karst.), birch (Betula pendula Roth and B. pubescens Ehrh.), and other broadleaves. The other broadleaved trees are assumed to have no commercial value. We maximize the sum of timber revenues and the value of carbon storage by optimizing the timing and intensity of thinnings and the potentially infinite rotation age. The optimization problem is solved in its general dynamic form using gradient-based interior point methods and a genetic algorithm. We present results for a mixed stand of Norway spruce and birch, and a mixed stand of Norway spruce, birch, and other broadleaves, and compare these to a pure Norway spruce stand. We show that carbon pricing increases stand volume by postponing harvests and limiting them to larger trees, and changes the optimal species composition by increasing the share of Norway spruce relative to birch. Further, carbon pricing incentivizes maintaining other broadleaves in the stand despite their lack of commercial value, thus increasing tree species diversity. We find that sawlog and total yields increase with carbon price. We show that the higher the number of tree species in a stand, the lower the marginal cost of carbon storage.