COST-EFFECTIVE CARBON
Colin Price
School of the Environment and Natural Resources
Bangor University
SOME PRICES FOR CARBON:
Note: these prices were compiled from a wide range of sources in
1993, and can probably be more or less doubled now.
Flux pricing method
Time-scale
Cost/tonne
Growth constraint: bottom-up
top-down
Extra cost of low carbon fuel
Ditto, discounted
Cost of sequestering carbon
Cost of altering radiative balance
Lost production, damage cost and
defensive spending
8 Carbon tax to achieve target
phased
phased
instant
future
prolonged?
prolonged?
perpetual
£0–240
£4–28
£125
£24
£5
trivial?
20p–£90
undefined
£65–180
1
2
3
4
5
6
7
CARBON STOCK: SEVERAL ROTATIONS
120
Carbon
in
system
(tonnes)
100
80
60
40
20
0
0
20
40
60
80 100 120 140
Time (years)
CO2
CO2
CO2
Post CO2 pulse temperature
change
UPTAKE AND THERMAL LAG
0
20
40
60 80 100 120 140 160 180 200
Lapse of time (years)
[Difference in mean annual net cost]
[Difference in mean carbon stock]
In an investment context, the break-even price
of carbon fixing is given by:
[Present
luetonne]
of costs]
[Priceva
per

[Tonnes
carbon
flux]
Present of
value
of costs]


[Priceofper
tonne]flux]
[Tonnes
carbon
CARBON STOCK: SEVERAL ROTATIONS
120
100
Carbon in
system 80
(tonnes)
60
40
Change
in carbon
(tonnes
per year)
20
0
-20
0
20
40
60 80 100 120 140
Time (years)
Photo: John Tay
Carbon in system
(tonnes)
CARBON RETENTION: TWO LOGGING SYSTEMS
200
150
100
50
Unlogged
RIL
CL
0
0
20
40
60
80
Time after logging (years)
100
120
Source of
figure
Discount
for cash
flows
Effective
discount
for carbon
Comment
Resultant
price/tonne
carbon
(approx.)
Add successively:
organisation,
operational,
overhead costs
$8
$22
$32
Financial
outlays for the
Sabah project
4%
4%
Price 1990
7%
7%
Cost of north
temperate
afforestation
$140
Hoen and
Solberg 1994
2%
2%
$26
7%
7%
Cost of a limited
modification (60%
of maximum) of
regional
silviculture to
enhance carbon
fixing
10%
0%
Cost of south
temperate
afforestation
$6
Sedjo and Ley
1997
Equivalent
range of RIL
prices/tonne
(approx.)
$4 – $41
$15
Source: Healey, Price & Tay (2000)
CARBON STOCK: SEVERAL ROTATIONS
120
Carbon
in
system
(tonnes)
100
80
60
40
20
0
0
20
40
60
80 100 120 140
Time (years)
Sitka spruce YC 12: 80 tonnes for nothing!
Sitka spruce YC 12: commercial versus “unmanaged”
[Mean annual net cost] =
£200
÷
[Difference of mean carbon]
?250 – 80 tonnes
=
£1.17 per tonne per year
Somewhat longer rotations:

give greater mean
growing stock storage

produce a greater
proportion of slowdecaying products

entail only slightly
reduced net annual
income, so …

represent cheap extra
carbon
DOUGLAS
FIR YC20
Tree carbon (tonnes)
250
200
Carbon
stored by
each regime,
averaged
over a growth
cycle.
150
100
50
0
Single-tree 65
0
5 10
15 20
25 30
35 40
45
Age (years)
Clear cut 53
Single-tree continuous cover forestry: worst case
(harvesting penalty = £5 / m3 ; dysgenic effect = –20%)
[Mean net cost per year = £230] ÷
(65 – 53) tonnes
= £19 per tonne per year
TWO SPECIES: CARBON FIXING
140
120
Carbon in 100
system
80
(tonnes)
60
40
20
0
Oak YC 6
Oak YC4
0
20
40
60
Time after planting (years)
SS YC12 th
80
100 120
The material of the moment…
Painted concrete
Photo: University of Wales
In an investment context, the break-even price
of carbon fixing is given by:
[Price per tonne]

[Present value of costs]

[Present value of tonnes of carbon flux]
SUMMED DISCOUNTED CARBON FLUXES
4
3.5
3
Disc'd
@ 2%
6%
Mean
flux
Current
flux
2.5
Carbon flux
(tonnes/ha)
2
1.5
1
0.5
0
Disc'd @ 2%
6%
0
10
20
30
40
50
Lapse of time (years)
60
THREE WAYS OF USING TREES TO REDUCE NET
CARBON EMISSIONS
Discount rate
Fix fossil fuel emissions
[a] Summed discounted cost
[b] Summed discounted tonnes C
Cost per tonne carbon = [a]  [b]
Plus cost of coal per tonne C
Total
Grow biomass fuel
Summed compounded cost = [a]  (1 + [dr])62
Biomass tonnes C
Cost per tonne carbon biomass
Harvesting and transport per tonne
Total
Fix fossil fuel emissions, then use the product
as biomass fuel
@ 6%
£1263
17.47
£72
£100
£172
@ 2%
£1487
63.65
£23
£100
£123
£46 813
135.47
£346
£80
£426
£5076
135.47
£37
£80
£117
£165
£87
THREE WAYS OF USING TREES TO REDUCE NET
CARBON EMISSIONS
Discount rate
Fix fossil fuel emissions
[a] Summed discounted cost
[b] Summed discounted tonnes C
Cost per tonne carbon = [a]  [b]
Plus cost of coal per tonne C
Total
Grow biomass fuel
Summed compounded cost = [a]  (1 + [dr])62
Biomass tonnes C
Cost per tonne carbon biomass
Harvesting and transport per tonne
@ 6%
£2526
17.47
£144
£200
£344
@ 2%
£2984
63.65
£46
£200
£246
£93 626 £10 152
135.47 135.47
£692
£74
£120
£120
Total
£812
Fix fossil fuel emissions, then use the product
as biomass fuel
£330
£194
£174
Newport, C12th replaced 1913?
Llandaff,c.1170 (replaced?)
Bangor, 1350?
St Asaph, C15th
Brecon, C15th
St Davids, C16th
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
CO2
Price of flux approach: grow-and-utilise-structurally
Note: add 10% to allow for carbon emissions in harvesting
Discount rate
Without steel
replacement
With steel
replacement
6%
3.5%
2%
1%
£172
£85
£31
FREE!
£34
£17
£6.5
FREE!
Even at a 6% discount rate:
Douglas fir yield class 20
cost of carbon = £25 / tonne
without steel replacement;
or £5 / tonne with steel
replacement