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Long-standing debates over the benefits of forest conservation vs. those of substitution and forest resource use continue to occupy attention in Europe and beyond. Moreover, many argue the carbon sequestration benefits of standing forest are greater than those from forest resource use and replanting. To study this question, we generate long-term scenario analyses based on different forest management strategies in Sweden, in particular comparing increasing forest use and increasing land set-asides over 100, 200 and 500 year cycles. We find that the cost of increasing land set-asides is reflected in a significant loss of the carbon benefits created by forest use (substitution and carbon sequestration). We explain this outcome through the loss of additional growth that occurs as forest in land set-asides matures and eventually reaches a steady state. For the Swedish forest, these costs are significant and may amount to the loss (lost opportunity) of annually providing and additional -14 MtCO2e in net annual removals. The EU-based LULUCF carbon accounting framework, however, does not recognize this benefit and thus may effectively encourage land set-asides at the expense of real, measurable forest and forest resource-based climate change mitigation.

We estimate the climate effects of directing forest management in Sweden towards increased carbon storage in forests with more land set-aside for protection, or towards increased forest production for the substitution of carbon-intensive materials and fossil fuels, relative to a reference case of current forest management. We develop various scenarios of forest management and biomass use to estimate the carbon balances of the forest systems, including ecological and technological components, and their impacts on the climate in terms of radiative forcing. The scenario with increased set-aside area and the current level of forest residue harvest resulted in lower cumulative carbon emissions compared to the reference case for the first 90 years, but then showed higher emissions as reduced forest harvest led to higher carbon emissions from energy and material systems. For the reference case of current forest management, increased harvest of forest residues gave increased climate benefits. The most climatically beneficial alternative, expressed as reduced cumulative radiative forcing, in both the short and long terms is a strategy aimed at high forest production, high residue recovery rate, and high efficiency utilization of harvested biomass. Active forest management with high harvest levels and efficient forest product utilization will provide more climate benefit, compared to reducing harvest and storing more carbon in the forest.