Economic Trade-Offs between Carbon Offset and Timber Opportunities in British Columbia’s Central Coast: A Decision Analysis Approach

Emerging carbon offset markets create economic opportunities to manage carbon in forests but represent a complex mix of decision-making challenges and are poorly understood among forest managers. I use a decision analysis to assess alternative forest management options in the context of Ecosystem-Based Management (EBM) in Heiltsuk traditional territory on the Central Coast of British Columbia. I use timber supply (SELES-STSM) and carbon budget projections (CBM-CFS3) while considering uncertainty in carbon offset and log prices. Carbon offsets provide strong economic opportunities that can compensate for foregone timber harvest revenue within existing carbon markets, but these benefits vary over time and are sensitive to uncertainty in price trends, costs, leakage, and discount rate. These findings can help forest managers and policy makers understand the opportunities and trade-offs of managing forests for timber harvest and carbon storage to better meet their objectives and obtain a more diverse range of benefits.