Capitalization and Capital Return in Boreal Carbon Forestry
Round 1
Reviewer 1 Report
According to past research investigating the economic feasibility of thinning practices, a few of them contain deficiencies restricting their applicability, like unrealistic assumptions of the yield of various timber assortments and pricing assumptions. In addition, it is evident that the optimal number of thinning, thinning intensity, and selection between continuous-cover forestry and clearcuttings depend on the applied discounting interest rate. This paper discusses the capital return rate and forest stand capitalization from carbon storage and sequestration. The results indicate that the carbon stock of boreal forest can be increased in various ways while omitting such capitalization premium, however, at the expense of capital return rate deficiency. Overall, this paper is well-organized. However, some details need to be added for clarity. Detailed comments are shown as follows:
- In the Introduction section, the author has well discussed the background knowledge and the critical value of this work. With a lot of references supported, the author has indicated the motivation of this work, and documented the deficiency from the previous researches.
- In Subsection 2.1, the author interprets Equations (1) to (4). Nevertheless, it is lack of explaining the function K, in which the tree growth formula, operative expenses, interests, and amortizations should be explained in detail.
- In Section 2, it is suggested that the author should provide more references to the equations to enhance the reliability and effectiveness of the equations.
- From the two datasets provided in Subsection2.3, there should be a study site located in Eastern Finland. Thus, more detailed information on the study site (including its critical value, tree species composition, and the adopted management strategies) should be further added.
- Most content in Section 3 only describes the figures of the expected value of the capital return rate, capitalization, and capital return rate deficiency in terms of various assumptions. However, it is lack of the author's interpretation for these terms. Hence, it is suggested to rearrange and rewrite the relevant paragraphs academically.
- In Section 3, the captions of Figures 1a, 1b, and 1c should be enhanced to capture the information of these figures.
- In Section 4, the author should have further discussion on the results documented in the previous sections. Specifically, a profound interpretation from the results and the previous researches should be provided.
- Lastly, the conclusion and limitation of the research should be provided at the end of the section.
Author Response
Thank you very much.
Regarding Equation (1), the meaning of the capitalization K is now described in detail, in terms of tangible and intangible assets. As the paper makes a (serious but not very successful) attempt to include an intangible asset into the capitalization. This is now more clearly expressed also in the Astract, as well as in the statement of the study objective in the Introduction. Actually, elaboration of the concept of Capitalization opens avenues for future research, as now mentioned in the Discussion.
Within section 2.1, seven literature references are given for the formulation of the financial approach. Two of them have mentioned the basic principle (decades ago), whereas five recent ones have elaborated the approach. An exception is the inclusion of intangible assets, here introduced as a novel feature. However, considering the enhanced introduction of the concept capitalization discussed above, the description is now supposed to be self-sufficient and does not necessarily require the reader to study the referenced literature.
The description of the two datasets is now elaborated. It is stated that the first dataset, the inventory-based growth model is applied to nine setups created computationally. Regarding the second dataset, based on observations of seven commercially unthinned spruce-dominated stands, the location of the sampling area is now specified. It is worth noting that regarding both datasets, further information is available from referenced sources.
The scientific training of the author includes a policy according to which a section “Results” should contain a presentation of results, instead of presenting interpretations of them. Interpretations should be placed within a section “Discussion”.
The author agrees that the clarity of Fig. 1 was not adequate. They simply contained too much data. Clarity is now improved by dividing the seven stands into two subsections, as was done in Figs. 5 and 6. This, unfortunately, has increased the number of Figures. However, such division was necessary for clarity.
The author agrees that the Discussion should be amended. The discussion did contain two elements. Firstly, the consequences of intangible capitalization premium were discussed. The critical discussion revealed that the estimate of the intangible capitalization induced bias. Secondly, a common reference was taken for the results of the first dataset, and the results were re-interpreted with this common reference. The amendment now contains a profound interpretation from the results, placed between the two original main elements. The final paragraph in the Discussion now discusses limitations and future perspectives.
A section “Conclusions” is now included, as proposed by the Reviewer.
Reviewer 2 Report
The article is interesting and actual.
However, it needs major improvements before being considered to publication.
The formatting of the manuscript tried to follow the template, but many errors and flaws can be found. For example:
Line 1: Is the email correct? I think something is missing.
Line 16: There are two consecutive ": :";
Line 67: avoid the 3rd person speech. "We" or "I" are informal ways to present the speech form. Use a more formal way.
Line 83: Equations must be properly formated. The same for the following equations.
Figure 1: the quality is very poor. Improve it, please. The same for all.
The author must avoid the use of several references concerning the same objective. This will overkill the references.
References are not following a sequence. The author should use a referencing software to automatically update the references.
Author Response
Thank you very much.
Yes, the e-mail address has been corrected.
The Reviewer is correct in most of the remarks. However, it appears to the author that Equations are formatted according to Journal instructions.
The capitalization K in the denominator of Eq. (1) was inadequately introduced. This deficiency has now been corrected. Actually, elaboration of this concept apparently opens avenues for future research, as now mentioned in the Discussion.
The author agrees that the clarity of Fig. 1 was not adequate. They simply contained too much data. Clarity is now improved by dividing the seven stands into two subsections, as was done in Figs. 5 and 6. This, unfortunately, has increased the number of Figures. However, such division was necessary for clarity.
The impression of the author is that non-trivial statements based on literature should be justified by at least five to seven references. This allows an interested reader to collect a relevant set of references for his/her verification of the statement. In addition, there often is scattering between the content of references. Then, two or three references would not convince.
The references are now numbered in the order of appearance. Within any statement, they are organized in chronological order, unless there is some reference dominating by its content so that it deserves to be put in the first place.
A section “Conclusions” is now included, possibly helping the use of the paper in environmental policy applications.
Reviewer 3 Report
Though the topic definitely falls into the journal scope, the current paper would not solicit much interests from the targeted readership of the journal, as the paper focuses too much on the capitalization calculation details while ignoring relating it to the discussion. For example, this paper can relate to nature-based solutions, or social-ecological system discussion: https://0-www-sciencedirect-com.brum.beds.ac.uk/science/article/pii/S2213305421000205 https://0-www-sciencedirect-com.brum.beds.ac.uk/science/article/pii/S0048969717320752https://royalsocietypublishing.org/doi/full/10.1098/rstb.2019.0120 https://0-www-sciencedirect-com.brum.beds.ac.uk/science/article/pii/S0959652620350940 https://0-www-sciencedirect-com.brum.beds.ac.uk/science/article/pii/S092134492100536X The writing needs improvement in terms of understandability and clarity. Abstract: “Firstly, any discount rate depending on maturity proposes clearcuttings soon after thin- 7ning as a computational artifact. Secondly, exponential interpolation with a constant discount rate 8violates an internal consistency criterion as rotation age increases”—avoid excessive background in the abstract. Focus on presenting this paper’s method and findings. Introduction—this part writes too much like a textbook introduction. Instead, it should focus on presenting research gaps and this paper’s method and goals. Equation 1-4: Again, these should not be introduced in textbook definitions. Rather, the relationship of each symbol to the forest carbon sink definition should be clarified. Line 204: Specific how they are empirically tested to validate your method. Figure 1-13: condense these into fewer figures and show the most important findings. Leave other figures to the appendix. The current readability is quite low. wih overwhelming details. Discussion: Avoid figures in discussion. Have a conclusion section to highlight the research findings and takeaway for policymakers.Author Response
Thank you very much.
This is a complete research paper within exact natural (and financial) science, not a policy paper, nor a popular science article.
The topic of the paper is the inclusion of an intangible asset on the capitalization of forest stands, and the consequences on carbon sequestration economics. Extensive data is used to approach the problem, according to rigorous mathematical procedures. An outcome is the intangible asset cannot be included, using the kinds of procedures examined. There are two exact reasons for that. They are essential results of the paper and are mentioned in the Abstract.
Consequently, the data allows conclusions only when the intangible asset is omitted. The conclusions however appear to be relevant since the two independent datasets agree, differently affected by the intangible asset. This is now explained in the paper.
The capitalization K in the denominator of Eq. (1) was inadequately introduced. This deficiency has now been corrected. Elaboration of this concept opens avenues for future research, as now mentioned in the Discussion.
The author thinks the clarity of Fig. 1 was not adequate. They simply contained too much data. Clarity is now improved by dividing the seven stands into two subsections, as was done in Figs. 5 and 6. This, unfortunately, has increased the number of Figures. However, such division was necessary for clarity.
The author agrees that the paper contains many Figures. Irritatingly many. However, it is difficult to see how they could be reduced or moved into an appendix. This is because this paper is data-driven. There are many aspects discussed, and they all are discussed in terms of two independent datasets.
It appears that the Discussion did not address the results adequately in its original form. Now, two paragraphs have been added in between the two pre-existing themes, addressing the outcome of Figures 1 to 13 (now to 14).
The author agrees that Figures should appear in Discussion only for a particular reason. However, such reasons often exist. In this case, Fig. 14 (now 15) demonstrates how the bias introduced by interpolation appears. This is an essential element in the Discussion. Fig. 15 (now 16) arranges the findings from the first dataset according to a common reference. This is a novel treatment and another essential element in the Discussion.
A section “Conclusions” is now included, as proposed by the Reviewer.
Reviewer 4 Report
The article “Capitalization and capital return in boreal carbon forestry” deals with a topic of great importance in the current context, especially due to the great utility of capitalization of forests in ecosystem services. Identifying the point of return is undoubtedly a fundamental aspect that helps in the decision making of any investment.
In general terms the article is well organized and suitable for publication in the journal Earth, however it has some aspects that could be improved.
In the Introduction topic, the author adequately presents the problem of the article and supports his ideas with many bibliographic references. However, the author should avoid self-citations, especially when there are other articles that refer to the same ideas. The study objectives are also clearly defined.
In Materials and Methods, the author adequately presents the development of his research reasoning. However, for the less informed readers, I miss a match of the parameters used. The author must specify in more detail the meaning of each parameter before presenting the formulas. This will improve understanding for a greater number of readers.
The results are well presented, however, in the methodology the author refers only to Picea abies. If you also want to show results from other species such as Pinus sylvestris (Figure 2), this information should also be included in the Materials and Methods topic. The graphs presented do not raise relevant doubts.
The discussion raises some interesting questions, but I think the article would gain importance if the author presented the main ideas in a new topic referring to the Conclusions.
Author Response
Thank you very much.
The author agrees that self-citations should be avoided, especially if other references are available. Unfortunately, this is not the case here. Even if one can, with some detective work, find that the basic principle has been identified by another author several decades ago, a repeatable procedure has been established only in previous work by this author. Another issue is that some earlier work of this author has contained deficiencies that have biased the outcome. Such deficiencies in the earlier work of this author are pointed out on lines 62 to 64.
Indeed, the capitalization K in the denominator of Eq. (1) was inadequately introduced. This deficiency has now been corrected. This has affected phrasing in the Abstract, as well as in the Conclusions. The elaboration of this concept opens avenues for future research, as now mentioned in the Discussion.
Within section 2.3. The two datasets applied the second dataset contains only stands dominated by Picea abies. The first dataset, however, does contain three tree species. The description of both of the datasets has now been amended.
A section “Conclusions” is now included, as proposed by the Reviewer.
Round 2
Reviewer 1 Report
The author has revised the manuscript based on my previous comments. Therefore, I suggest the manuscript can be accepted for the publication for the journal of "Earth".
Author Response
Thank you very much for your advice.
Reviewer 2 Report
The author addressed all my questions and for that reason I recommend the article to be published.
Author Response
Thank you very much for your advice.
Reviewer 3 Report
The general revision attempt is quite poor as there is not much improvment in the literature, theory, or general structure/clarity of the paper. English writing also needs much improvement. I suggest using English editing services.
Author Response
Thank you.
An English editing service has been used.
Reviewer 4 Report
The author has amended and answered all questions correctly.
As I have no further questions to ask, I consider that the article "Capitalization and capital return in boreal carbon forestry" can continue with the process for publication.
Author Response
Thank you very much for your advice.
