Economics of carbon sequestration in community forests: Evidence from REDD+ piloting in Nepal

Reducing Emissions from Deforestation and Forest Degradation (REDD+) has been piloted in developing countries as a climate change mitigation strategy, providing financial incentives for carbon sequestration in forests. This paper examines the economic feasibility of REDD+ in community forests within two watersheds in central Nepal, Ludikhola and Kayarkhola, using data on forest product demand, carbon sequestration, carbon price and REDD+ related costs. The benefits of REDD+ are about $7994, $152, and $64 per community forest, per hectare of forest area, and per household in Ludikhola watershed compared to $4815, $29, and $56 in Kayarkhola watershed, respectively, under the business-as-usual scenario. Compared to the EU ETS carbon price ($10.3/tCO₂e), the average break-even carbon price in community forests is much higher in Kayarkhola watershed ($41.8/tCO₂e) and much lower in Ludikhola watershed ($2.4/tCO₂e) when empirical estimates of annual expenditure in community forests are included in the analysis. The incorporation of annual expenditure estimates and opportunity cost of sequestered carbon (in the form of firewood prices in local markets) in the analysis suggests that community forests are economically infeasible for REDD+ at the prevailing carbon prices. The implication of our findings is that economic feasibility of REDD+ in community forests depends on the local contexts, carbon prices and the opportunity costs, which should be carefully considered in designing REDD+ projects.     

Marginal Abatement Cost Curves for UK Agricultural Greenhouse Gas Emissions

This article addresses the challenge of developing a ‘bottom‐up’ marginal abatement cost curve (MACC) for greenhouse gas (GHG) emissions from UK agriculture. An MACC illustrates the costs of specific crop, soil and livestock abatement measures against a ‘business as usual’ scenario. The results indicate that in 2022 under a specific policy scenario, around 5.38 Mt CO₂ equivalent (e) could be abated at negative or zero cost. A further 17% of agricultural GHG emissions (7.85 Mt CO₂e) could be abated at a lower unit cost than the UK Government’s 2022 shadow price of carbon [£34 (tCO₂e)^?1]. The article discusses a range of methodological hurdles that complicate cost‐effectiveness appraisal of abatement in agriculture relative to other sectors.     

Forest carbon benefits,costs and leakage effects of carbon reserve scenarios in the United States

This study evaluated the potential effectiveness of future carbon reserve scenarios, where U.S. forest landowners would hypothetically be paid to sequester carbon on their timberland and forego timber harvests for 100 years. Scenarios featured direct payments to landowners of $0 (baseline), $5, $10, or $15 per metric ton of additional forest carbon sequestered on the set aside lands, with maximum annual expenditures of $3 billion. Results indicated that from 1513 to 6837 Tg (Teragrams) of additional carbon (as carbon dioxide equivalent, CO₂e) would be sequestered on U.S. timberlands relative to the baseline case over the next 50 years (30–137 Tg CO₂e annually). These projected amounts of sequestered carbon on timberlands take into account projected increases in timber removal and forest carbon losses on other timberlands (carbon leakage effects). Net effectiveness of carbon reserve scenarios in terms of overall net gain in timberland carbon stocks from 2010 to 2060 ranged from 0.29 tCO₂e net carbon increase for a payment of $5/tCO₂e to the landowner (71% leakage), to 0.15 tCO₂e net carbon increase for a payment of $15/tCO₂e to the landowner (85% leakage). A policy or program to buy carbon credits from landowners would need to discount additions to the carbon reserve by the estimated amount of leakage. In the scenarios evaluated, the timber set-asides reduced timberland area available for harvest up to 35% and available timber inventory up to 55%, relative to the baseline scenario over the next 50 years, resulting in projected changes in timber prices, harvest levels, and forest product revenues for the forest products sector.     

Marginal abatement costs of greenhouse gas emissions: broadacre farming in the Great Southern Region of Western Australia

Broadacre agriculture is a major emitter of greenhouse gases (GHG). To improve efficiency of climate change policies, we need to know the marginal abatement costs of agricultural GHG. This article combines calculations of on‐farm GHG emissions with an input‐based distance function approach to estimate the marginal abatement costs for a broadacre farming system in the Great Southern Region of Western Australia. The results show that, in the study region, the average marginal abatement cost for the 1998–2005 periods was $29.3 per tonne CO₂‐e. Farms with higher crop output shares were found to have higher marginal abatement costs. Overall, our results indicate that broadacre agriculture is among the lowest cost sources of GHG mitigation.     

Potential of woody biomass production for motivating widespread natural resource management under climate change

In this study we assessed the potential of woody biomass (short-rotation Mallee Eucalypts) for renewable energy generation as an economically viable way of motivating widespread natural resource management under climate change in the 11.9 million ha Lower Murray agricultural region in southern Australia. The spatial distribution of productivity of agricultural crops and pasture, and biomass was modelled. Average annual economic returns were calculated under historical mean (baseline) climate and three climate change scenarios. Economically viable areas of biomass production were identified where the profitability of biomass is greater than the profitability of agriculture under each scenario for three factory gate biomass prices. The benefits of biomass production for dryland salinisation, wind erosion, and carbon emissions reduction through biomass-based renewable energy production were also modelled. Depending on climate scenario, at the median price assessed ($40/tonne) biomass production can generate $51.4–$88 M in annual net economic returns, address 41,226–165,577 ha at high risk of dryland salinisation and 228,000–1.4 million ha at high risk of wind erosion, and mitigate 10.4–12 million tonnes of carbon (CO₂^−e) emissions annually. Economically viable areas for biomass production expanded under climatic warming and drying especially in more marginal agricultural land. Under the baseline, the area at high risk of dryland salinisation was more than double that at high risk of wind erosion. However, under climatic warming and drying the relative importance of these two natural resource management objectives switched with the area at high risk of wind erosion becoming much larger. As biomass production can achieve multiple natural resource management objectives, it may provide a land use policy option that is adaptable to changing priorities and economically resilient given climatic uncertainties. For such a significant and enduring land use change policy it is prudent to assess both the economic and environmental potential under climate change.     

Quantifying the impact of farmers' social networks on the effectiveness of climate change mitigation policies in agriculture

To reduce agricultural greenhouse gas (GHG) emissions, farmers need to change current farming practices. However, farmers' climate change mitigation behaviour and particularly the role of social and individual characteristics remains poorly understood. Using an agent-based modelling approach, we investigate how knowledge exchange within farmers' social networks affects the adoption of mitigation measures and the effectiveness of a payment per ton of GHG emissions abated. Our simulations are based on census, survey and interview data for 49 Swiss dairy and cattle farms to simulate the effect of social networks on overall GHG reduction and marginal abatement costs. We find that considering social networks increases overall reduction of GHG emissions by 45% at a given payment of 120 Swiss Francs (CHF) per ton of reduced GHG emissions. The per ton payment would have to increase by 380 CHF (i.e., 500 CHF/tCO₂eq) to reach the same overall GHG reduction level without any social network effects. Moreover, marginal abatement costs for emissions are lower when farmers exchange relevant knowledge through social networks. The effectiveness of policy incentives aiming at agricultural climate change mitigation can hence be improved by simultaneously supporting knowledge exchange and opportunities of social learning in farming communities.     

Agriculture's Likely Role in Meeting Canada's Kyoto Commitments*

Voluntary adoption of beneficial management practices will be the primary means by which farmers cut net greenhouse gas (GHG) emissions. The offset system will not be a major driver due to (a) the relatively low prices likely to be offered by large final emitters facing an emission cap, (b) discounts applied to those prices for temporary sequestration, (c) the transaction costs and risk premiums associated with signing carbon contracts, and (d) the low elasticity of supply of CO₂ abatement. Although Canadian farmers are likely to participate to only a limited extent in the carbon‐offset market, many will find it profitable to adopt one or more of the BMPs for reducing net GHG emissions. Canadian agriculture is likely to contribute significantly to net emission reductions by voluntarily sequestering carbon due to the adoption of zero till in the last decade, and possibly by cutting fertilizer levels in the next decade. The contribution will be mainly a response to meeting personal economic objectives rather than being induced by direct incentives through the offset program.     

The right place to grow rice for the Japanese market: comparative analysis of greenhouse gas emissions of rice cultivation in Japan and the United States

One consequence of increasing agricultural trade is a shift of geographic location of agricultural activity to more economically productive countries. Whether or not the economic efficiency translates to environmental efficiency for agricultural goods is an open question. To examine environmental implications of shifting agricultural location, we analysed the life-cycle greenhouse gas (GHG) emissions of rice production in Japan and the US for the Japanese market in a comparative manner. This paper presents the life-cycle assessment of brown japonica rice. Our computation of GHG emissions of rice production in Japan and the US were 3.54 and 2.99?kgCO₂-eq kg-rice^?1, respectively. With respect to harvested area, the emissions were 18.4 in Japan and 27.8?tCO₂-eq ha^?1 in the US. For Japan to be environmentally competitive with the US production, fundamental restructuration of field size is necessary to increase yield. In conclusion, economic efficiency does not translate to environmental efficiency with the case of rice production. Importing rice is both economically and environmentally viable option for the Japanese market.     

Carbon mitigation potential of the French forest sector under threat of combined physical and market impacts due to climate change

Objectives(1) To quantify the contribution of the French forest-wood product chain in terms of carbon sequestration and substitution when accounting for both the physical impacts (shifts in tree growth and mortality rates) and the market impacts (increased demand of harvested wood products (HWP)) of climate change (cc) and the subsequent forest managers adaptations; (2) To assess the uncertainty of the impacts on the above carbon balance and on forest allocation; and (3) To assess the role of managers’ expectations toward these future, uncertain but highly anticipated, impacts.MethodologyWe used a bio-economic model of the French Forest Sector (FFSM++) that is able to consider and integrate: (a) the effects of climate change over forest dynamics; (b) forest investment decisions (among groups of species) according to expected profitability; and (c) market effects in terms of regionalised supply, consumption and trade of HWP, depending on the forest resource stocks and international prices. By including both forest dynamics and forest products, we can evaluate the carbon balance taking the following elements into consideration: (a) carbon sequestered in live and dead biomass in the forest; (b) carbon sequestered in HWP; (c) carbon substituted when wood is used in place of fossil fuels or more energy-intensive materials; and (d) carbon released by forest operations.ResultsWhen the model is run at constant conditions for the next century, the average carbon potential of French forests is 66.2–125.3 Mt CO₂ y⁻¹, depending on whether we consider only inventoried wood resources, HWP pools and direct energy substitution, or if we also account for the carbon stored in tree branches and roots and if we consider the more indirect, but also largely more subjective, material substitution. These values correspond to 18.3% and 34.7%, respectively, of the French 2010 emissions (361 Mt CO₂). However, when we consider both the probable increment of coniferous mortality and changes in forest growth, plus the rise in HWP demand worldwide, the average sequestration rate of the French forest decreases by 6.6–5.8% to 61.8–118.0 Mt CO₂ y⁻¹. Running partial scenarios, we can assess the relative interplay of these two factors, where the price factor increases the HWP stock while decreasing the forest stocks (where the latter effect prevails), while the physical impact of climate change reduces both, but to a lesser extent. Considering short-sighted forest managers, whose behaviour is based uniquely on the observed conditions at the time decisions are made, we obtain a limited effect of the overall carbon balance but a relatively large impact on the area allocation of broadleaved vs. coniferous species.     

Consequences of carbon offset payments for the global forest sector

Long-term effects of policies to induce carbon storage in forests were projected with the Global Forest Products Model. Offset payments for carbon sequestered in forest biomass of $15–$50/t CO₂e applied in all countries increased CO₂ sequestration in world forests by 5–14 billion tons from 2009 to 2030. Limiting implementation to developed countries exported environmental damage from North to South, as developing countries harvested more, decreasing their stored CO₂e. Substantially more CO₂e was sequestered by allocating a given budget to all countries rather than to developed countries only. As offset payments increased wood prices relatively more than they decreased production, timber revenues generally increased. In the few countries with timber revenues losses they were more than compensated by the offset payments.     

Is forest carbon sequestration at the expense of bioenergy and forest products cost-efficient in EU climate policy to 2050?

Forest management affects the quantity of CO₂ emissions in the atmosphere through carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy. The main question studied in this paper is whether forest carbon sequestration is worth increasing at the expense of bioenergy and forest products to achieve the EU emissions reduction target for 2050 in a cost-efficient manner. A dynamic cost minimisation model is used to find the optimal combination of carbon abatement strategies to meet annual emissions targets between 2010 and 2050. The results indicate that forest carbon sequestration is a low-cost abatement method. With sequestration, the net present costs of meeting EU carbon targets can be reduced by 23%.     

Assessing policy and carbon price settings for incentivising reforestation activities in a carbon market: An Australian perspective

Policy makers often seek to incentivise reforestation to achieve either carbon abatement and/or the provision of other co-benefits such as landscape remediation, biodiversity, and social outcomes. But where incentives are for carbon abatement alone, uptake is often slower than expected, with previous estimates of economic viability for reforestation often overlooking some economic and technical barriers. Management of revegetation projects (e.g. species mix, configuration in belts or blocks and density of stocking) influences not only rates of sequestration of carbon (and therefore expected revenue from carbon markets), but also establishment and maintenance costs. These management factors were considered via a sensitivity analysis of a financial cash flow model of different scenarios of revegetation projects with respect to scale of operation of projects, quantification methodology applied, and type of payment contract.Results reinforced that policy makers seeking to incentivise revegetation for carbon abatement in addition to co-benefits such as landscape remediation may require additional crediting for these co-benefits as projects are often unviable with carbon payments alone. For example, simple linear tree plantings are likely to be most competitive in a market based solely on carbon abatement, while blocks of mixed-species biodiversity plantings would be uncompetitive given their relatively low rates of carbon sequestration and high establishment costs. Economic viability of revegetation projects may also be enhanced through: aggregation of projects to increase economies of scale; carbon markets allowing flexibility in approaches for quantification (e.g. application of calibrated models, or undertaking of direct field sampling), and; facilitating payment contracts that provide upfront capital through forward contracts.     

An open-access method for targeting revegetation based on potential for emissions reduction,carbon sequestration and opportunity cost

We propose a simple heuristic that uses open-access models and government data on agricultural activities to estimate total carbon emissions from agriculture, the gross carbon benefit and the opportunity cost per tonne CO₂-e from revegetating to environmental plantings or plantation forestry. We test this across ten areas of mixed land-use that represent diverse Australian agricultural systems along a rainfall transect. The local value of agricultural production was obtained from government statistics and used to estimate the current economic opportunity cost of converting cleared agricultural land to mixed environmental plantings for carbon sequestration. Gross carbon benefit from revegetation was closely related to current agricultural use, as was financial opportunity cost. These were not related simply to site productivity potential or rainfall. The proportion of land cleared for agriculture that would need to be re-vegetated to achieve a localised zero-carbon land-use scenario was calculated by the ratio of current agricultural emissions to gross carbon benefit from revegetation; this ranged from 13% to 66% for groups of agricultural industries across Australian rainfall transects. While the heuristic does not capture the detail of models built specifically for local research questions it does provide a different lens on the questions policy makers and land managers may ask about the costs and benefits of revegetating agricultural land, and provides open-access methods to guide them.     

Carbon-accounting methods and reforestation incentives

The emission of greenhouse gases, particularly carbon dioxide, and the consequent potential for climate change are the focus of increasing international concern. Temporary land-use change and forestry projects (LUCF) can be implemented to offset permanent emissions of carbon dioxide from the energy sector. Several approaches to accounting for carbon sequestration in LUCF projects have been proposed. In the present paper, the economic implications of adopting four of these approaches are evaluated in a normative context. The analysis is based on simulation of Australian farm–forestry systems. Results are interpreted from the standpoint of both investors and landholders. The role of baselines and transaction costs are discussed.     

Landowner net benefit from Stone pine (Pinus pinea L.) afforestation of dry-land cereal fields in Valladolid,Spain

This analysis measures the net benefit that a landowner could obtain from changing current dry-land cereal fields into Stone pine plantations in Portillo and Viana (Valladolid, Spain). We apply cost–benefit analysis techniques to estimate the present value of Stone pine afforestation net benefit by considering an infinite series of forestry rotations. We simulate three Stone pine silviculture models at each of the two sites. In addition, we estimate landowner extended net benefits from Stone pine afforestation when we consider a hypothetical payment for the carbon sequestration service. Results show that, when government subsidies are included, Stone pine afforestation only offers positive landowner net benefit in Portillo when both medium and high-stocking silviculture models are applied. Taking into account carbon prices up to €45 tC^?1 (€12.3 tCO₂^?1), Stone pine afforestation gives landowner positive extended net benefits for the three silviculture models simulated at the Portillo and Viana sites.     

An assessment of the economic and environmental potential of biomass production in an agricultural region

The establishment of deep-rooted perennial species and their processing for biomass-based products such as renewable energy can have benefits for both local and global scale environmental objectives. In this study, we assess the potential economic viability of biomass production in the South Australian River Murray Corridor and quantify the resultant benefits for local and global scale environmental objectives. We model the spatial distribution of economically viable biomass production in a Geographic Information System and quantify the model sensitivity and uncertainty using Monte Carlo analysis. The total potentially viable area for biomass production under the Most Likely Scenario is 360,728 ha (57.7% of the dryland agricultural area), producing over 3 million tonnes of green biomass per annum, with a total Net Present Value over 100 years of A$ 88 million. The salinity in the River Murray could be reduced by 2.65 EC (μS/cm) over a 100-year timeframe, and over 96,000 ha of land with high wind erosion potential could be stabilised over a much shorter period. With sufficient generating capacity, our Most Likely Scenario suggests that economically viable biomass production could reduce carbon emissions by over 1.7 million tonnes per annum through the production of renewable energy and a reduced reliance on coal-based electricity generation. Our analyses suggest that biomass production is a potentially viable alternative agricultural system that can have substantial local scale environmental benefits with complimentary global scale benefits for climate change mitigation.     

Land change in the Brazilian Savanna (Cerrado), 1986–2002: Comparative analysis and implications for land-use policy

The Brazilian Cerrado, a biodiverse savanna ecoregion covering 1.8 million km² south and east of the Amazon rainforest, is in rapid decline because of the expansion of modern agriculture. Previous studies of Cerrado land-use and land-cover (LULC) change imply spatial homogeneity, report widely varying rates of land conversion, use ambiguous LULC categories, and generally do not attempt to validate results. This study addresses this gap in the literature by analyzing moderate-resolution, multi-spectral satellite remote sensing data from 1986 to 2002 in two regions with identical underlying drivers. Unsupervised classification by the ISODATA algorithm indicates that Cerrado was converted to agro-pastoral land covers in 31% (3646 km²) of the study region in western Bahia and 24% (3011 km²) of the eastern Mato Grosso study region, while nearly 40% (4688 km² and 5217 km², respectively) of each study region remained unchanged. Although aggregate land change is similar, large and contiguous fragments persist in western Bahia, while smaller fragments remain in eastern Mato Grosso. These findings are considered in the current context of Cerrado land-use policy, which is dominated by the conservation set-aside and command-control policy models. The spatial characteristics of Cerrado remnants create considerable obstacles to implement the models; an alternative approach, informed by countryside biogeography, may encourage collaboration between state officials and farmer-landowners toward conservation land-use policies.     

Does carbon farming provide a cost‐effective option to mitigate GHG emissions? Evidence from China

In this study, we apply a whole farm bioeconomic analysis to explore the changes in land use, farm practices and on‐farm greenhouse gas (GHG) emission under varying levels of agricultural greenhouse gas abatement incentives in the form of a carbon tax for a semi‐arid crop‐livestock farming system in China's Loess Plateau. Our results show that the optimised agricultural enterprises move towards being cropping‐dominated reducing on‐farm emission since livestock perform is the major source of emission. Farmers employ less oats‐based and rapeseed‐based rotations but more dry pea‐based rotations in the optimal enterprise mix. A substantial reduction in on‐farm greenhouse gas emission can be achieved at low cost with a small increase in carbon incentives. Our estimates indicate that crop‐livestock farmers in China's Loess Plateau may reduce their on‐farm GHG emission between 16.6 and 33 per cent with marginal abatement costs <￥100/t CO₂e and ￥150/t CO₂e in 2015 Chinese Yuan. The analysis implies that reducing greenhouse gas emission in China's semi‐arid crop‐livestock agriculture is potentially a low‐cost option.     

Urban sprawl and climate change: A statistical exploration of cause and effect,with policy options for the EU

This study provides a brief evaluation of the relationship between trends in transport emissions and urban land-use by analysing correlation between transport CO₂ emissions data, GDP and population data with land-use change data from the CORINE database for EU Member States between 1990 and 2000.     

Paying for ecological services in Ecuador: The political economy of structural inequality

Paying Indigenous communities to conserve land for carbon sequestration is a controversial way of tackling climate change. Critics argue that paying for ecological services (or ‘PES’) in the form of carbon offset programmes reduces land and social relations to an economic transaction that devalues Indigenous livelihoods and communities. At the same time, empirical studies have shown that Indigenous communities have accepted and even embraced the idea of being paid to conserve land for climate change mitigation. This paper explores this apparent contradiction by investigating the implementation of Programa Socio Bosque (PSB), a PES carbon sequestration programme in Ecuador. Drawing upon primary fieldwork in the highland province of Chimborazo, it makes the case that PES programmes need to be understood as form of state power that reconfigures and reinforces the ways in which Indigenous peoples engage with the state. Particularly important in this regard is the role of the state in reinforcing the agrarian conditions under which Indigenous communities use and interpret PES payments while at the same time reconfiguring new forms of land conservation. Empirically, the research reveals important complementarities between the goals of carbon sequestration PES programmes and Indigenous land-use practices. Methodologically, it highlights the importance of situating the study of PES programmes in a context of land struggles, community–state relations and agrarian change.