Evaluating carbon offsets from forestry and energy projects

Under the Kyoto Protocol, industrial countries accept caps on their emissions of greenhouse gases. They are permitted to acquire offsetting emissions reductions from developing countries - which do not have emissions limitations - to assist in complying with these caps. Because these emissions reductions are defined against a hypothetical baseline, practical issues arise in ensuring that the reductions are genuine. Forestry-related emissions reduction projects are often thought to present greater difficulties in measurement and implementation, than energy-related emissions reduction projects. The author discusses how project characteristics affect the process for determining compliance with each of the criteria for qualifying. Those criteria are: 1) Additionality. Would these emissions reductions not have taken place without the project? 2) Baseline and systems boundaries (leakage). What would business-as-usual emissions have been without the project? And in this comparison, how broad should spatial, and temporal system boundaries be? 3) Measurement (or sequestration). How accurately can we measure actual with-project emissions levels? 4) Duration or permanence. Will the project have an enduring mitigating effect? 5) Local impact. Will the project benefit its neighbors? For all the criteria except permanence, it is difficult to find generic distinctions between land use change and forestry and energy projects, since both categories comprise diverse project types. The important distinctions among projects have to do with such things as: a) The level and distribution of the project's direct financial benefits. b) How much the project is integrated with the larger system. c) The project components'internal homogeneity and geographic dispersion. d) The local replicability of project technologies. Permanence is an issue specific to land use and forestry projects. The author describes various approaches to ensure permanence, or adjust credits for duration: the ton-year approach (focusing on the benefits from deferring climatic damage, and rewarding longer deferral); the combination approach (bundling current land use change and forestry emissions reductions with future reductions in the buyer's allowed amount); a technology-acceleration approach; and an insurance approach.Montreal Protocol,Environmental Economics&Policies,Climate Change,Decentralization,Global Environment Facility,Environmental Economics&Policies,Energy and Environment,Carbon Policy and Trading,Montreal Protocol,Climate Change

The domestic benefits of tropical forests : a critical review emphasizing hydrological functions

The authors critically review the literature on the net domestic (within-country) economic benefits of protecting tropical forests, focusing on hydrological benefits and the production of nontimber forest products. (The review does not consider other important classes of benefits, including global benefits of all kinds, ecological benefits which do not have instrumental economic value, and the existence value of forests.) Their main conclusions: (1)The level of net domestic benefits from forest preservation is highly sensitive to the alternative land use and to local climatic, biological, geological, and economic circumstances. When the alternative use is agroforestry or certain types of tree crops, the preservation of natural forests may yield no instrumental domestic benefits. (2)The hydrological benefits from forest preservation are poorly understood and likely to be highly variable. They may also be fewer than popularly assumed: Deforestation has not been shown to be associated with large-scale flooding. Tropicaldeforestation is generally associated with higher, not lower, dry season flows. Although it is plausible that deforestation should affect local precipitation, the magnitude and even the direction of the effects are unknown, except in the special case of cloud forests that"harvest"passing moisture. The link between deforestation and downstream sediment damage is sensitive to the basic topography and geology. Where sediment transport is slow - as in large, low-gradient basins - downstream impacts may manifest themselves in the distant future, so that the net present value of damage is small. Steep basins near reservoirs or marine fisheries, on the other hand, can cause substantial damage if land cover is severely disturbed. But only a few pioneering studies have examined the economics of reservoir sedimentation, and improved models of both sediment transport and dam function are needed. (3) The most impressive point estimates of forest value based on nontimber forest products are often based on atypical cases of faulty analysis. Where domesticated or synthetic substitutes exist, the nontimber forest product-related rents for natural forests will usually be driven toward zero.Water Conservation,Roads&Highways,Wetlands,Hydrology,Environmental Economics&Policies,Water Resources Assessment,Forestry,Hydrology,Roads&Highways,Wetlands

Measuring the initial impacts on deforestation of Mato Grosso's program for environmental control

Although private forest use in Brazil has been regulated at least since the Forest Code of 1965, cumulative deforestation in the Brazilian Amazon reached 653,000 km2 by 2003 (INPE 2004). Much of this deforestation is illegal. In 1999, the State Foundation of the Environment (FEMA) in Mato Grosso introduced an innovative licensing and enforcement system to increase compliance with land use regulations. If successful, the program would deter deforestation that contravenes those regulations, including deforestation of riverine and hillside forest (permanent preservation areas), and reduction of a property's forest cover below a specified limit (the legal forest reserve requirement). This study seeks to assess whether introduction of the program affected landholder behavior in the desired direction. Simple before/after comparisons are not suitable for this purpose, because there is considerable year to year variation in deforestation due to climatic and economic conditions. Nor is it valid to assess program impacts by comparing licensed and unlicensed landholders, even though the program focused its enforcement efforts on the former. This is because, first, landholders with no intention of deforesting may choose to become licensed; and second, unlicensed landholders may be deterred from deforestation by the mere existence of a serious program that aims for universal licensing. To meet these challenges, the study applies a difference-in-difference approach to geographically explicit data. It looks for, and confirms, post-program declines in deforestation in high-priority enforcement areas relative to other areas; in more easily observed areas relative to less easily observed areas; and in areas of low remaining forest cover (where further deforestation is probably illegal) relative to high remaining forest cover. Thus, even against a backdrop of higher aggregate deforestation (driven in part by higher agricultural prices), there is evidence that the program in its early stages (before 2002) did shift landholder behavior in a direction consistent with reduced illegal deforestation. (The legality of deforestation was not however directly observed). The study hypothesizes that this behavioral change resulted from an initial perception of increased likelihood of the detection and prosecution of illegal deforestation, following announcement of the program. The study does not assess Mato Grosso's new system for environmental regulation (SLAPR) impacts following the change of state administration in 2003.Energy and Environment,Environment and Energy Efficiency,Environmental Economics&Policies,Forestry,Ecosystems and Natural Habitats

Roads, lands, markets, and deforestation : a spatial model of land use in Belize

Rural roads promote economic development but also facilitate deforestation. To explore the tradeoffs between development and environmental damage posed by road building, the authors develop and estimate a spatially explicit model of land use. This model takes into account location and land characteristics and predicts land use at each point on the landscape. They find that: (a) market access and distance to roads strongly affect the probability of agricultural use, especially for commercial agriculture; (b) high slopes, poor drainage, and low soil fertility discourage both commercial and semi subsistence agriculture; and (c) semi-subsistence agriculture is especially sensitive to soil acidity and lack nitrogen (confirming anthropological findings that subsistence farmers are shrewd judges of soil). Spatially explicit models are analytically powerful because they exploit rich spatial variation in causal variables, including the precise siting of roads. They are useful for policy because they can pinpoint threats to particular critical habitats and watersheds. This model is a descendant of the venerable von Thunen model. It assumes that land will tend to be devoted to its highest-value use, taking into account tenure and other constraints. The value of a plot for a particular use depends on the land's physical productivity for that use and the farmgate prices of relevant inputs and outputs. A reduced-form, multinomial logit specification of this model calculates implicit values of land in alternative uses as a function of land location and characteristics. The resulting equations can then be used for prediction or analysis. The model was applied to cross-sectional data for 1989-92 for Belize, a forested country currently experiencing rapid expansion of both subsistence and commercial agriculture. A geographic information system was used to manage the spatial data and extract variables based on the three kilometer sample grid. Three land uses were distinguished:"natural"vegetation, comprising forests, woodlands, wetlands, and savanna; semi-subsistence agriculture, comprising traditional milpa (slash-and-burn) cultivation and other nonmechanized cultivation of annual crops; and commercial agriculture, consisting mainly of sugarcane, pasture, citrus, and mechanized production of corn and kidney beans. Two dimensions of distance to market were distinguished: the distance from each sample point to the road, and on-road travel time to the nearest town. Data on a wide variety of land and soil characteristics were also used.Wetlands,Water Conservation,Environmental Economics&Policies,Climate Change,Land Use and Policies,Forestry,Environmental Economics&Policies,Climate Change,Energy and Environment,Wetlands

Quantifying the rural-urban gradient in Latin America and the Caribbean

This paper addresses the deceptively simple question: What is the rural population of Latin America and the Caribbean (LAC)? It argues that rurality is a gradient, not a dichotomy, and nominates two dimensions to that gradient: population density and remoteness from large metropolitan areas. It uses geographically referenced population data (from the Gridded Population of the World, version 3) to tabulate the distribution of populations in Latin America and in individual countries by population density and by remoteness. It finds that the popular perception of Latin America as a 75 percent urban continent is misleading. Official census criteria, though inconsistent between countries, tend to classify as"urban"small settlements of less than 2,000 people. Many of these settlements are however embedded in an agriculturally based countryside. The paper finds that about 13 percent of Latin America populations live at ultra-low densities of less than 20 per square kilometer. Essentially these people are more than an hour's distance from a large city, and more than half live more than four hours'distance. A quarter of the population of Latin America is estimated to live at densities below 50, again essentially all of them more than an hour's distance from a large city. Almost half (46 pecent) of Latin America live at population densities below 150 (a conventional threshold for urban areas), and more than 90 percent of this group is at least an hour's distance from a city; about one-third of them (18 percent of the total) are more than four hours distance from a large city.Agricultural Research,Demographics,Health Indicators,,Health Information&Communications Technologies

Creating markets for habitat conservation when habitats are heterogeneous

A tradable development rights (TDR) program focusing on biodiversity conservation faces a crucial problem defining which areas of habitat should be considered equivalent. Restricting the trading domain to a narrow area could boost the range of biodiversity conserved but could increase the opportunity cost of conservation. The issue is relevant to Brazil, where TDR-like programs are emerging. Current regulations require each rural property to maintain a forest reserve of at least 20 percent, but nascent policies allow some tradability of this obligation. The authors use a simple, spatially explicit model to simulate a hypothetical state-level program. They find that wider trading domains drastically reduce landholder costs of complying with this regulation and result in environmentally preferable landscapes.Wetlands,Environmental Economics&Policies,Banks&Banking Reform,Water Conservation,Climate Change,Forestry,Environmental Economics&Policies,Wetlands,Climate Change,Banks&Banking Reform

The role of tropical forests in supporting biodiversity and hydrological integrity: a synoptic overview

Conservation of high-biodiversity tropical forests is sometimes justified on the basis of assumed hydrological benefits - in particular, the reduction of flooding hazards for downstream floodplain populations. However, the"far-field"link between deforestation and distant flooding has been difficult to demonstrate empirically. This simulation study assesses the relationship between forest cover and hydrology for all river basins intersecting the world's tropical forest biomes. The study develops a consistent set of pan-tropical land cover maps gridded at one-half degree latitude and longitude. It integrates these data with existing global biogeophysical data. The study applies the Water Balance Model - a coarse-scale process-based hydrological model - to assess the impact of land cover changes on runoff. It quantifies the impacts of forest conversion on biodiversity and hydrology for two scenarios - historical forest conversion and the potential future conversion of the most threatened remaining tropical forests. A worst-case scenario of complete conversion of the most threatened of the remaining forested areas would mean the loss of another three million km2 of tropical forests. Increased annual yield from the conversion of threatened tropical forests would be less than 5 percent of contemporary yield in aggregate. However, about 100 million people - 80 million of them in floodplains - would experience increases of more than 25 percent in annual water flows. This might be associated with commensurate increases in peak flows, though further analysis would be necessary to gauge the impact on flooding. The study highlights basins in Southeast Asia, southern China, and Latin America that warrant further study.Wetlands,Forestry,Climate Change,Drylands&Desertification,Earth Sciences&GIS