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close this bookCarbon Counts: Estimating Climate Change Mitigation in Forestry Projects (WRI, 1997, 32 pages)
View the document(introduction...)
View the documentAcknowledgments
View the documentI. Introduction
Open this folder and view contentsII. Leakage
Open this folder and view contentsIII. Recommendations
View the documentIV. Conclusions
View the documentNotes

IV. Conclusions

A successful project that satisfies the demands leading to land-use change, and offers social benefits can effectively confront deforestation. Such projects are more successful in terms of estimating carbon sequestration and providing significant ancillary benefits. The case studies and the Leakage Index described above provide useful tools for selecting carbon sequestration projects. And the eight recommendations can greatly reduce the danger of leakage.

The increase in tree planting projects relative to other types of projects is unfortunate. This trend, which will reduce options for experimentation, appears to be based on the erroneous assumption that tree planting projects are easier to measure and less prone to leakage. Tree planting projects will have a greater impact when they are employed as an alternative to the destruction of primary forests for timber or fuelwood use.

Box 3. LUCS Model

LUCS is a carbon accounting device that compares project interventions to a baseline scenario. The model estimates the amount of carbon sequestered by approximating land use and relative biomass changes on the landscape over time with and without the project. These changes are driven by key variables, such as population growth and the accompanying food and fuel needs, agricultural productivity, technological change, wood use, and harvesting practices. Typically the project will seek to alter these interactions, thus changing carbon flows.

Table 3 summarizes net carbon estimates using LUCS as Well as the results Of a simple cost-benefit analysis. Project costs for FACE and Olafo were discounted at 4 percent, the rate for the investing countries, whereas the U.S.-funded projects were discounted at 5 percent The carbon was not discounted.

Cost-benefit analysis is generally a useful tool for highlighting choices and making each project's assumptions transparent. It can lead to more informed decision making. Estimates of the cost per ton of carbon sequestered can be useful in comparing dissimilar projects. However, such comparisons, can also be misleading. A single number often masks a host of assumptions, each with its own effects and underlying value judgments. By contrast, cost-benefit analysis is sensitive to assumptions about discount rates, the price of carbon, and the time horizon used to analyze the project.

Because of the data difficulties and theoretical uncertainties involved, cost-benefit analysis should not be the final word on sequestration projects. In particular, the choice of a discount rate carries a heavy analytical burden: it represents equity, intergenerational effects (which will be particularly acute with regard to global warming), risk aversion, and net social welfare. In addition, cost-benefit analysis cannot fully incorporate nonmarket social and environmental benefits, such as biodiversity, increases in the quality of life. Or watershed protection, which are often crucial elements in carbon sequestration projects.

Table 3 Case Study Summaries

Project

Size (hectares)

Total Cost

Total Carbon Sequestered (tons)

Cost per Ton Carbon Sequestered ($)

CARE/Guatemala

3,000,000

$8,800.000

39.000,000

$0.23

Innoprise/Malaysia

1,400

$189,000

197,000

$0.95

FACE/Czech Republic

15.000

$5,865,000

1,624,000

$4.37

OLAFO/Guatemala

57,800

$1,060,000

4,920,000

$0.28

RUSAFOR/Russia

420

$50,000

29,000

$1.79

CARFIX/Costa Rica

290,187

$12,500.000

7,630,000

$1.46

Protecting existing carbon sinks by preventing deforestation is more cost-effective than creating new sinks. The cost-per-ton comparisons in Box 3 show in every instance that tree planting is more expensive than preventing deforestation. The Olafo project and CARFIX, both of which focus on the latter activity, cost 28 cents and $1.46 per ton, respectively. In contrast, the Krkonose project and RUSAFOR, in Russia, both of which focus on tree planting, were estimated to cost $4.37 and $1.79, respectively. The finding that the costs for forestation projects are greater than the costs of retarding deforestation is supported by a recent Harvard study. (29)

Projects designed to satisfy the demands driving land-use change, thus preventing deforestation, provide benefits to a wide range of communities. These benefits include goods, such as timber, and services such as watershed revitalization, biodiversity habitat, homes and sustenance to indigenous peoples, and, of course, climate regulation. Many of these services are not quantified in the marketplace. As a result, standing forests are often undervalued. Furthermore, countries with high rates of deforestation - such as Brazil, Indonesia, Suriname, and Russia-most need to capture the full value of forests. (30)

Carbon storage benefits are a potentially important element in the valuation of forests. (31) The industrialized world can help encourage the sustainable use of forest resources by paying for the benefits it receives. Forestry and land-use projects aimed at capturing these benefits will provide only a small portion of the total needed greenhouse gas reductions, but preliminary evaluations of their worth and potential are encouraging. (32) Properly designed projects offer low-cost greenhouse gas mitigation and provide reliable carbon sequestration estimates. Their risk of failure is also reduced. Experimentation with a broad range of land-use projects should be encouraged, especially under the pilot phase, to determine which projects are most reliable and promising.