Including both a credit for increase C sequestration plus a tax on carbon pollution will result in the fastest transition from timber extraction to forest conservation.

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Question restated: The claim is that implementing both a credit for increased carbon sequestration and a tax on carbon pollution would yield the fastest shift from timber extraction toward forest conservation.
Option 1 (True): This stance argues that combining a positive incentive (sequestration credit) with a negative incentive (carbon tax) creates a strong, dual signal to landowners and markets. The sequestration credit rewards activities that increase stored carbon, effectively lowering the net cost of conservation or reforestation, while the carbon tax raises the cost of extracting timber in ways that release carbon. Together, they amplify the economic benefits of preserving forests and the penalties for cutting them for short-term gains. In economic terms, this is a pair of internalizing externalities—positive externalities from sequestration and negative externalities from emissions—so the overall return on forest conservation can dominate the revenue from timber extraction, speeding the transition. Additionally, the dual approach can reduce leakage by making conservation financially attractive even when timber markets are globally competitive, as long as the policy design ensures credible incentives, appropriate credit levels, and consistent enforcement.
Option 2 (False): While the combination is theoretically potent, several real-world frictions could blunt the speed of transition. Political feasibility might limit the size or persistence of taxes and credits, reducing their effectiveness. Administrative complexity, leakage to neighboring regions, market distortions, and unintended consequences (such as forest conservation taking place on non-torest lands or impacting local livelihoods negatively) can slow the transition. Moreover, partial or poorly calibrated incentives may fail to overcome entrenched timber industry sunk costs, infrastructure, and market dependencies. The phrase “fastest transition” assumes ideal policy design and perfect implementation, which is rarely the case in practice.
Option 3 (If applicable in some frameworks): Some analyses emphasize that relying solely on either a carbon tax or sequestration credit, without the other, can be insufficient to unlock rapid change due to behavioral and market inertia. The combination aims to address both demand-side disincentives and supply-side incentives, but this synergy depends on factors such as governance quality, price signals, and complementary policies (land rights, enforcement, and alternative livelihoods).
Option 4 (If applicable to regional specifics): In certain contexts, equally important are complementary measures like support for forest-friendly livelihoods, monitoring technology, and gradual phase-in periods to avoid shocks. While the stated combo policy has strong theoretical appeal for accelerating conservation, its practical speed hinges on design choices and local conditions.
In summary, the argument for the combined credit plus tax rests on stronger internalization of carbon costs and rewards, which should, in theory, accelerate a shift toward conservation more than either instrument alone. However, the real-world speed of that transition is contingent on policy design, governance, market responses, and mitigation of unintended consequences, which means the outcome is not guaranteed in all settings.

FRST_V 201 101 2025W1 FRST 201 Final Exam 2025

Including both a credit for increase C sequestration plus a tax on carbon pollution will result in the fastest transition from timber extraction to forest conservation.

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