Carbon versus Timber Economy in Mediterranean Forests

Forests produce goods and services, but the forest economy is based on goods, with market price, more than on services. Under Mediterranean climate conditions forests have low timber production, being frequently financially loss-making, despite the environmental services provided, such as carbon sequestration. Timber production and carbon sequestration are compatible, and a proper valuation of both can allow for a more balanced management. The aim of this paper is to assess financially a scenario based on maximizing carbon sequestration versus another based on maximizing timber harvesting in a Mediterranean forest. To do that, timber stock, growth and harvesting, and carbon sequestration have been calculated. Applying market prices for timber and CO2 both scenarios have been assessed, carrying out a sensitivity analysis. Maximising carbon sequestration was more profitable in the vast majority of combinations; timber harvesting was only more profitable if CO2 prices fell below 30% and timber price increases more than 20%; timber price rise is possible, but a collapse in CO2 price is not probable. The real barrier is that while timber is as a commodity with market price, carbon sequestration is not. The challenge for the future is to pay for carbon sequestration, mobilising resources from polluting sectors to forests