Opportunity Costs of Carbon Emissions Stemming from Changes in Land Use

Heli Lu,Guifang Liu

doi:10.3390/su7043665

Abstract

The REDD (Reducing Emissions from Deforestation and Forest Degradation) mechanism allows carbon sinks to be used as carbon credits in order to offset emissions from other sources. However, this practice has raised a number of issues relating to financial incentives. In this study, we develop a spatially explicit model for predicting carbon emissions from deforestation that meet baseline levels as well as farmers’ opportunity costs (measured in US dollars per ton of CO2e) under three temporal scenarios with several potential discount rates for agricultural income. Additionally, we use two different accounting methods recommended by the Intergovernmental Panel on Climate Change (IPCC), including the average storage method and the “ton-year approach,” to evaluate emissions reductions. We find that farmers are more likely to prefer REDD in the short-run when discount rates are higher than 10%. However, further analysis indicates that opportunity costs would increase significantly over longer periods of time (middle-term schemes of 35 years or long-term schemes of 55 years), thereby dissuading farmers from choosing REDD. Our findings highlight the drawbacks in using REDD to mitigate global climate change and conserve forests based on farmers’ financial incentives.

Highlights

Tropical forests play a significant role in the global carbon budget [1,2,3] because they contain as much carbon in their vegetation and soils as all temperate-zone and boreal forests combined
We examined the opportunity costs used for reducing emissions from deforestation and forest degradation (REDD) in Central Kalimantan, Indonesia
Our study area consisted of 47,940.75 ha in a 22.5 km × 21.5 km square area located in the southeast region, north of Palangka Raya (Figure 3). This area was covered by heath forests and peat swamps; since 2000, this area has been plagued by large-scale deforestation

Summary

Introduction

Tropical forests play a significant role in the global carbon budget [1,2,3] because they contain as much carbon in their vegetation and soils as all temperate-zone and boreal forests combined. Concentrations) did not address the clearing of forests for plantations (such as oil palm, rubber, and cacao), despite the fact that it is the main source of released carbon from land use change. Such failures to address tropical forests and their deforestation in international emissions reduction schemes may be hindering efforts to mitigate global climate change. This concern was addressed during the 15th

Methods

Results

Conclusion