Economic impacts of short rotation woody crops in Canada

Canada is seeking cost-effective means to mitigate greenhouse gas emissions, particularly CO2. One of the promising means is the short rotation woody crops (SRWC) plantation, a silvicultural approach to establishing and managing fast growing plantations on previously cleared lands. This paper utilizes the data set provided by recent harvesting operations at the Ellerslie SRWC Technical Development Site in Edmonton (Alberta) to assess the ability of SRWC using High Yield Afforestation to mitigate GHG emissions and generate more wood fibre and the investment attractiveness to establish future plantations. Results illustrate that at current trading prices for carbon credits and market prices of woodchips, expected rates of return on investment for SRWC were relatively low, despite a positive net present value ($400/ha for 20 year planting cycle without carbon credits). However, estimates from the Ellerslie site indicate that 330 tons of CO2-eq per hectare are captured above and below ground over the 20 year plantation cycle. However, higher future carbon prices, a well-developed market for buying and selling carbon credits, as well as adapted policy including additional government sponsored programs for carbon credits, could make SRWC more attractive and dramatically change the economics of afforestation in the future.