Aino Assmuth, Hilja Autto, Kirsi-Maria Halonen, Emmi Haltia, Suvi Huttunen, Jussi Lintunen, Annika Lonkila, Tiina M. Nieminen, Paavo Ojanen, Mikko Peltoniemi, Kaisa Pietilä, Johanna Pohjola, Esa-Jussi Viitala, Jussi Uusivuori provide insights for designing and implementing a fiscal regulation concerning forest carbon emissions. They highlight several key economic factors that forest policies need to consider. They address the concept of the leakage effect which refers to the unintended consequence where carbon savings achieved in one area are offset by increased emissions in another, mostly caused by the shift of forest activities. To mitigate this issue, policymakers should adopt a broader geographical approach.
The concept of additionality is also highlighted, requiring that carbon sequestration truly brings ecological benefit and does not overshadow what would have happened without public intervention. The authors also underscore the complexity of predicting forest owners’ behavior which can be influenced by personal or economic factors. Moreover, setting an appropriate carbon price is crucial to achieve a balance that encourages participation while preventing market distortions.
It is important to consider the non-economic factors in the formulation of climate policies. Ecological preoccupations should take into account the balance between all different types of forest and not focus solely on the reforestation and afforestation of a specific type to preserve biodiversity. Social acceptance is crucial for the success of the policy and it is important to gain the support of forest owners as well as public and private stakeholders. A communication campaign and a fair payment system should be developed to encourage broader participation. From a legal standpoint, the geographical design of forest policies requires global cooperation, especially when it comes to social aid regulations and fair competition.
The proposed solutions for forest carbon payment schemes involve a two-stage approach. A limited scheme with low carbon prices can be implemented, focusing on additional carbon storage and avoiding significant market distortions. Eventually, the scheme could expand and include all relevant soil types.
