Although Finland's forest resources have been utilized intensively, th
e size of the total volume of the growing stock has increased since th
e mid-1960s, and hence increasing amounts of carbon have been sequeste
red by forests. The net sequestration by forests has also been substan
tial when compared with the CO2 emissions resulting from energy genera
tion and consumption based on fossil fuels and peat. It is also import
ant, from the point of view of mitigating the effects of climate chang
e, to assess how the sequestration capacity of forests may change unde
r changing climatic conditions. This paper presents the results of a s
tudy assessing the development of the forest and wood-product carbon b
udget for Finland, based on regionally measured data, detailed dynamic
models, and recent predictions concerning the changing climate. At th
e starting point for the simulation (1990), nearly 90% of the forest s
ector's carbon storage was found in the forest. Regular management tra
nsferred carbon from forests to wood products. Under the current clima
tic conditions, the simulated forest carbon storage increased 45% by t
he year 2100, and the wood-product storage by 320%, as a consequence o
f continuous production. Under changing climate conditions, the forest
carbon storage increased, but started to decline when the temperature
increase exceeded 2.5 degrees C within 40 years. (C) 1998 Published b
y Elsevier Science Ltd.