Managing potential conflicts between carbon sequestration programs and biodiversity

This paper presents an optimal control model to analyze reforestations with two different species, including commercial values, carbon sequestration and biodiversity or scenic values. We first solve the model qualitatively with general functions and then develop it assuming quadratic functions. We discuss the implications of partial or total internalization of environmental values and show that internalizing only carbon sequestration may have negative impacts on biodiversity/scenic values. To evaluate the practical relevance reforestations in the South-west of Spain with cork-oaks and with eucalyptus are compared. We do the analysis with two different carbon crediting methods, the Carbon Flow Method and the Ton Year Accounting Method, showing that the first implies to increase more the forest surface than the second. However, the first implies as well to decrease the proportion of cork-oaks compared to eucalyptus, while the second method increases the proportion of cork-oaks. A contingent valuation study shows that cork-oak reforestations have a positive impact on visitors’ welfare while reforestations with eucalyptus impact negatively. If biodiversity-scenic values would be internalized, no eucalyptus reforestations would take place at all.