Bury the wood is one idea. I've recently heard that salt water is also good for this. This is why mangrove forests are 4 or 5 times better carbon sinks than rainforests.
But with that logic you could bury the wood, not build a hydro plant and then plant new trees.
Yes please.
Unless that means burning more coal/gas/oil...
If too expensive to clear the land currently and so currently it doesn't get done, the economic value could be at least slightly improved by logging the area for the wood if it is mandated to have to clear it first.