Potential economic value of carbon credits in forest restoration plots in northern Thailand

ABSTRACT: This study evaluates the potential economic value of carbon credits generated through forest restoration using the Framework Species Method (FSM) in northern Thailand. Tree carbon accumulation was measured across four different sites: non-restored control plots, 12- and 24-year-old restoration plots, and reference forests. Using allometric equations and logistic growth modelling, results showed that restored plots accumulated 87.46 tC/ha (49% of reference levels) after 12 years and 149.84 tC/ha (84%) after 24 years. The economic valuation of carbon credits using a cost–benefit analysis indicated that carbon credits could return significant revenue (up to $37,064/ha over 24 years). One ton of CO₂ on the European Emission Allowance (EUA) market was 60.94 EUR/tCO₂, which is equal to 248.04 USD/tC. The cost of carbon sequestration by the FSM for 100% tree-planting restoration is 10.34 USD/tCO₂. Subtracting this establishment cost leaves a profit of 5,687 USD/ha over 24 years, which can outweigh restoration costs significantly. A SWOT analysis underscored Thailand’s emerging carbon market strengths, such as institutional partnerships and scientific foundations for forest-based carbon credits, but also identified weaknesses such as governance gaps and inequitable profit sharing.