The length of the time horizon has a strong
effect on the importance of discounting. As time
horizons become longer, the distortions become
greater if no discounting is applied. In the
case of forest sector options that can transfer
carbon to very long-term pools, these pools can
dominate the results if very long horizons are
considered without discounting. In the case of
an infinite time horizon, equilibrium conditions
will apply. Slow buildup of carbon in very-slowturnover
classes of wood products dominates
the results at equilibrium, but occurs at such
remote times that it has little bearing on present
decisions when discounting is applied. These
problems also apply to calculations made under
the assumption that the shadow price of carbon
increases at the same rate as the discount rate
for money, thereby allowing analysis without
discounting carbon.