Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels

- Low income farmers have a longer rotation and lower land expectation value (LEV).
- There is a tradeoff between forest biodiversity and LEV.
- Low income farmers are more sensitive in LEV to discount rates and gain less if carbon price increases.

This study aimed to estimate the optimal forest rotation age for tropical plantations of a native tree species, Canarium album (Lour.) under the management of high, medium, and low income groups of farm households of Vietnam. The results suggest that: (i) the optimal rotation age for the low income group is longer than that for the high income group; (ii) low income farmers are more sensitive in terms of the land expectation value to changes in discount rate; (iii) low income farmers gain less if the carbon price increases; and (iv) the carbon payment scheme at the start of a rotation is more financially attractive to forest farmers, but the carbon payment scheme at the end of a rotation is more advantageous in terms of forest biodiversity. These findings lead to potential policy implications for forest management for the provision of multiple ecosystem services in the context of a developing country, demonstrating a tradeoff between forest income and biodiversity conservation. While an increase in carbon prices would benefit forest farmers, we also suggest that these farmers could be compensated for their income losses or rewarded to maintain or increase forest biodiversity. However, relatively greater attention could be paid to compensating low income farmers as they potentially lose more with an increase in discount rate and gain less with an increase in carbon price.