This report evaluates two critical forest management issues and applies these results to the forests of the Republic of Korea. One issue concerns the optimal strategy for managing forests designated for timber management. We discuss alternative strategies that have been applied in forestry and recommend an updated dynamic version of the Faustmann model. The second issue that we address is how to incorporate carbon sequestration into a timber model. Again we review a few alternative approaches suggested in the literature. We recommend forest managers adopt a dynamic forest sequestration strategy that is consistent with the overall optimal control model of carbon mitigation in their country.
Korea rapidly planted trees over a three decade period beginning in the 1970’s to recover lost tree cover during the Korean War. Many Korean forests are now approaching the age at which they should be harvested. Harvest rates in Korea should increase rapidly in the coming decades. Harvested lands should be immediately replanted to assure renewed future harvests.
Forest sequestration should be motivated by the carbon price each decade. The carbon price will likely rise over time as greenhouse gas concentrations increase and marginal damage rises. By using the carbon price at each decade as the incentive to sequester carbon in forests, the carbon forest sequestration can be consistent with Korea’s overall carbon mitigation plan. As forest carbon is sequestered each year, forest owners should receive a rental payment for that carbon. Such a dynamic incentive will insure an efficient forest carbon sequestration program. At foreseeable carbon prices Korea should be able to sequester an additional 2.7 billion tons of carbon dioxide in Korean forests by 2140.