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Abstract
Adequately representing dynamic characteristics of land use change and forestry in
computable general equilibrium models is challenging but essential if modellers are
to provide credible assessments of policies that directly or indirectly influence these
phenomena. In this paper, we show how a dynamic representation of planted or
naturally regenerating forests may be integrated within a neoclassical, intertemporal
general equilibrium model. We demonstrate the application of such a model to assess
the impacts of including forestry within a hypothetical emissions trading scheme in
the US, showing the resulting changes in land use and increases in the optimal
rotation length.