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Article

Two Manifestations of Market Premium in the Capitalization of Carbon Forest Estates

Lehtoi Research, FIN-81235 Lehtoi, Finland
Academic Editors: Antonio Zuorro, Wing-Keung Wong and Gabriele Di Giacomo
Energies 2022, 15(9), 3212; https://doi.org/10.3390/en15093212
Received: 23 March 2022 / Revised: 21 April 2022 / Accepted: 25 April 2022 / Published: 27 April 2022
(This article belongs to the Special Issue Techno-Economic and Environmental Analysis of Low-Carbon Technologies)
In this study, the effect of capitalization premium in forest estate markets on forest management and climate change mitigation economics is investigated. It is shown that proportional goodwill in capitalization induces linear scaling of the financial return, without any contribution to sound management practices. However, there is a financial discontinuity, as harvesting deteriorates goodwill. Such deterioration might be partially avoided by entering the real estate market. Conversely, a capitalization premium set on bare land as a tangible asset would increase timber storage and carbon sequestration. Observations indicate that the proportional goodwill is closer to reality within the Nordic Region, resulting in continuity problems. View Full-Text
Keywords: capital return rate; expected value; carbon storage; carbon rent capital return rate; expected value; carbon storage; carbon rent
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MDPI and ACS Style

Kärenlampi, P.P. Two Manifestations of Market Premium in the Capitalization of Carbon Forest Estates. Energies 2022, 15, 3212. https://doi.org/10.3390/en15093212

AMA Style

Kärenlampi PP. Two Manifestations of Market Premium in the Capitalization of Carbon Forest Estates. Energies. 2022; 15(9):3212. https://doi.org/10.3390/en15093212

Chicago/Turabian Style

Kärenlampi, Petri P. 2022. "Two Manifestations of Market Premium in the Capitalization of Carbon Forest Estates" Energies 15, no. 9: 3212. https://doi.org/10.3390/en15093212

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