Economic Value of Tropieal Forest from the Carbon Sequestration Viewpoint

Abstract

Tropical forest has close relationship to climate change from several viewpoints, such as carbon sequestration, carbon fertilization, biomass energy supply and climate mitigation This paper is an attempt to reply to the question: how much the economic value of tropical forest is from the carbon sequestration viewpoint For this purpose, three approaches of economic evaluation (demand-side, supply-side and market-equilibrium approaches) are explained, and the market-equilibrium approach is recommended for this case study. Then a market equilibrium economic model, “dynamic optimization model” is applied to the estimation of Malaysian tropical forest value, and it is evaluated as 330-760 billion US dollar. Finally, major factors to change such economic values are explained with some notes for methodology application.