From models to markets: A systematic review of forest carbon sequestration costs

Abstract

Forest carbon sequestration projects play a crucial role in achieving global carbon neutrality goals and addressing climate change challenges. A systematic review of literature on carbon sequestration costs is essential to improve the accuracy of calculations, ensure the economic feasibility of projects, and promote active carbon market transactions. This paper systematically reviews the main estimation methods and influencing factors of forest carbon sequestration costs based on existing literature, and compares cost estimates across countries within a full life cycle cost framework of forest carbon sequestration projects. The findings are as follows: the accounting methods for forest carbon sequestration costs include the afforestation cost method, opportunity cost method, comprehensive cost method, and minimum carbon price method, the latter of which is currently the most comprehensive and accurate for cost evaluation. Results also reveal that the influencing factors of forest carbon sequestration costs exhibit three core patterns, that is, the widespread presence of “nonlinearity”, “policy–market duality”, and “natural–artificial substitution relationship”. Moreover, across the full project life cycle, the four major cost categories are afforestation costs, maintenance costs, transaction costs, and opportunity costs. Significant differences are found in cost estimates across countries and regions, and methodological choices also have a great impact on estimation results, thus affecting the reliability of cross-regional comparisons. Summarizing research progress on forest carbon sequestration costs can provide theoretical support for the implementation of forest carbon sequestration projects and market transactions, helping to achieve carbon neutrality goals and promote future sustainable development.