Abstract
The effectiveness of periodical payment for forested lands as an incentive system to stop a conversion of forested lands is analyzed. Four simple models are outlined and analyzed to investigate behavior of the land manager whether to maintain the lands remain forested or to convert them to other uses. The analysis is pure theoretical employing the optimal control theory. A key element to induce the land manager to adopt forest conservation rather than forest conversion is a combination of periodical payments for the forested lands and the desirable scrap value. Without the desirable scrap value, periodical payments of carbon stock, regardless of the tariff, cannot stop the conversion; the tariff affects only the time when the conversion will be conducted but it is not sufficient to induce the land manager not to convert the forested lands. On the basis of this analysis, then policy implication is outlined. In order to provide the desirable scrap value, then a policy change is required. However, its implementation very likely encounters serious challenges from the land manager.
Highlights
The aim of Reducing Emissions from Deforestation and Degradation (REDD)+ is to encourage developing countries to contribute to climate change mitigation efforts by: i) reducing greenhouse gas emissions (GHG) by slowing, halting and reversing forest loss and degradation; and ii) increasing removal of GHGs from the earth's atmosphere through the conservation, management and ex-pansion of forests.1 I have a problem with this kind of approach because once a forest has achieved its maximum stock the land on which the forest grows becomes a warehouse for merely storing carbon
Whereas there are so many places that practically cannot produce biomass at all, such as desert (Table 1). These kind of places are more suitable for warehousing the global carbon stock, while the tropical forests are more suitable for producing biomass containing the carbon
The objective of writing this paper is to show theoretically the effectiveness ofcarbon credits in stopping the conversion of forested lands for alternative uses
Summary
The aim of REDD+ is to encourage developing countries to contribute to climate change mitigation efforts by: i) reducing greenhouse gas emissions (GHG) by slowing, halting and reversing forest loss and degradation; and ii) increasing removal of GHGs from the earth's atmosphere through the conservation, management and ex-pansion of forests. I have a problem with this kind of approach because once a forest has achieved its maximum stock the land on which the forest grows becomes a warehouse for merely storing carbon. The carbon credits meant in this paper are periodical payment for the forested land and final payment for the remaining forested land at the end of the contract This scheme of the payments may be considered as one form of REDD+. 4 2 4 34 5 70 conversion, regardless of the tariff paid This periodical payment needs to be combined with the scrap value of the forested lands. As suggested by Morel and Morel (2012), in order for carbon credits awarded for reducing emissions from deforestation and degradation of forests (REDD) to be effective, they need to be competitive with alternative land uses. Since the Hamiltonian is linear in the control variable x(t), we have a bang- bang solution as follows: x(t )* It indicates that the optimal conversion rate x(t )∗ is dependent on the costate vari- able λ(t ). If p < c , the conversion will never be conducted
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