Carbon Finance Schemes - Incentives for Forest and Agroforestry Systems

Manfred Zeller,Stefan Schwarze,Christina Seeberg-Elverfeldt

doi:10.1038/npre.2008.2504.1

Abstract

AbstractDeforestation contributes a quarter of all anthropogenic greenhouse gas emissions. On the island of Sulawesi in the vicinity of the Lore Lindu National Park, smallholders contribute to deforestation processes with their agricultural practices, specifically with cocoa plantations. This study assesses the impact of carbon sequestration payments for forest management systems on the prevailing land use systems. Additionally, the level of incentives which induces farmers to adopt sustainable agroforestry practices is determined. We show that low carbon credit prices have a small impact on household income. However, with rising prices, the poorest households can realise an increase of 18 percent. The majority of the households have an incentive to adopt the more sustainable shade intensive agroforestry system and stop deforestation activities with prices observed on markets. The cost-efficiency of avoided deforestation, compared to biofuels, is demonstrated. The study shows that forestry activities provide an important opportunity as climate mitigation strategies.

Highlights

Forest cover is decreasing globally and developing countries, especially those in tropical areas, experience even higher rates of deforestation due to a variety of contributing factors including agricultural expansion
Low carbon credit prices of €5 tCO2e-1 result in annuity payments of 4 percent of the cocoa gross margin for high shade agroforestry systems (AFS) (€100 ha-1), and less than 1 percent of the sun-grown AFS cocoa gross margin (€1,460 ha-1) whereas prices of €25 tCO2e-1 result in payments of 18 and 2 percent respectably
The highest carbon sequestration payments are always obtained for the high shade AFS and decline towards the AFS III

Summary

Introduction

Forest cover is decreasing globally and developing countries, especially those in tropical areas, experience even higher rates of deforestation due to a variety of contributing factors including agricultural expansion. The region’s mean annual deforestation rate of 0.3 percent between 1983 and 2002 3 does not include plantations under shade trees or the intensification process among the cocoa agroforestry systems (AFS), whereby farmers gradually reduce the shade tree cover. The focus of the present research is twofold: to assess the impact of payments for carbon sequestration activities on the land use systems of smallholders in the regions bordering the LLNP in Indonesia, and to determine if payments provide an incentive for the adoption of more sustainable land use practices contributing to the conservation of the rainforest margin

Framework

Data and Methods

Impact of carbon payments on smallholders’ land use systems

Reducing emissions from deforestation and forest degradation

Conclusions