Abstract
BackgroundSeveral previous global REDD+ cost studies have been conducted, demonstrating that payments for maintaining forest carbon stocks have significant potential to be a cost-effective mechanism for climate change mitigation. These studies have mostly followed highly aggregated top-down approaches without estimating the full range of REDD+ costs elements, thus underestimating the actual costs of REDD+. Based on three REDD+ pilot projects in Tanzania, representing an area of 327,825 ha, this study explicitly adopts a bottom-up approach to data assessment. By estimating opportunity, implementation, transaction and institutional costs of REDD+ we develop a practical and replicable methodological framework to consistently assess REDD+ cost elements.ResultsBased on historical land use change patterns, current region-specific economic conditions and carbon stocks, project-specific opportunity costs ranged between US$ -7.8 and 28.8 tCOxxxx for deforestation and forest degradation drivers such as agriculture, fuel wood production, unsustainable timber extraction and pasture expansion. The mean opportunity costs for the three projects ranged between US$ 10.1 – 12.5 tCO2. Implementation costs comprised between 89% and 95% of total project costs (excluding opportunity costs) ranging between US$ 4.5 - 12.2 tCO2 for a period of 30 years. Transaction costs for measurement, reporting, verification (MRV), and other carbon market related compliance costs comprised a minor share, between US$ 0.21 - 1.46 tCO2. Similarly, the institutional costs comprised around 1% of total REDD+ costs in a range of US$ 0.06 – 0.11 tCO2.ConclusionsThe use of bottom-up approaches to estimate REDD+ economics by considering regional variations in economic conditions and carbon stocks has been shown to be an appropriate approach to provide policy and decision-makers robust economic information on REDD+. The assessment of opportunity costs is a crucial first step to provide information on the economic baseline situation of deforestation and forest degradation agents and on the economic incentives required to halt unsustainable land use. Since performance based REDD+ carbon payments decrease over time (as deforestation rates drop and for each saved ha of forest payments occur once), investments in REDD+ implementation have a crucial role in triggering sustainable land use systems by investing in the underlying assets and the generation of sustainable revenue streams to compensate for opportunity costs of land use change. With a potential increase in the land value due to effective REDD+ investments, expenditures in an enabling institutional environment for REDD+ policies are crucial to avoid higher deforestation pressure on natural forests.
Highlights
Several previous global REDD+ cost studies have been conducted, demonstrating that payments for maintaining forest carbon stocks have significant potential to be a cost-effective mechanism for climate change mitigation
The results of global REDD+ cost estimates can only be used to a limited extent for many Sub-Saharan African countries, as most of the studies [1,2,5] were conducted in REDD+ countries (e.g. Brazil, Bolivia, Cameroon, Democratic Republic of the Congo, Ghana, Indonesia, Malaysia, and Papua New Guinea) with relatively high forest carbon stocks (i.e. > 100 tC/ha [8]) in the moist tropics
Our work focuses on a practical bottom-up assessment of the full range of REDD+ costs, including opportunity, implementation, transaction and institutional costs for three Tanzanian REDD+ pilot projects (Jane Goodall Masito Ugalla Ecosystem Pilot Area (JGP); Tanzania Forest Conservation Group / Mjumita project (TFCG) - Kilosa site and Lindi site; Table 1)
Summary
Several previous global REDD+ cost studies have been conducted, demonstrating that payments for maintaining forest carbon stocks have significant potential to be a cost-effective mechanism for climate change mitigation. These studies have mostly followed highly aggregated top-down approaches without estimating the full range of REDD+ costs elements, underestimating the actual costs of REDD+. Several REDD+ cost studies have been conducted [26] asserting that payments for maintaining forest carbon stocks have significant potential to be a cost-effective climate change mitigation and human development measure These studies mainly build upon top-down global empirical or global simulation models using highly aggregated data without taking into consideration regional differences. This reinforces the importance of regional differentiation when assessing REDD+ economics
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