The high costs of conserving Southeast Asia\u27s lowland rainforests

Mechanisms that mitigate greenhouse-gas emissions via forest conservation have been portrayed as a cost-effective approach that can also protect biodiversity and vital ecosystem services. However, the costs of conservation - including opportunity costs - are spatially heterogeneous across the globe. The lowland rainforests of Southeast Asia represent a unique nexus of large carbon stores, imperiled biodiversity, large stores of timber, and high potential for conversion to oil-palm plantations, making this region one where understanding the costs of conservation is critical. Previous studies have underestimated the gap between conservation costs and conversion benefits in Southeast Asia. Using detailed logging records, cost data, and species-specific timber auction prices from Borneo, we show that the profitability of logging, in combination with potential profits from subsequent conversion to palm-oil production, greatly exceeds foreseeable revenues from a global carbon market and other ecosystem-service payment mechanisms. Thus, the conservation community faces a massive funding shortfall to protect the remaining lowland primary forests in Southeast Asia. © 2011 The Ecological Society of America

On fair, effective and efficient REDD mechanism design

The issues surrounding 'Reduced Emissions from Deforestation and Forest Degradation' (REDD) have become a major component of continuing negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). This paper aims to address two key requirements of any potential REDD mechanism: first, the generation of measurable, reportable and verifiable (MRV) REDD credits; and secondly, the sustainable and efficient provision of emission reductions under a robust financing regime

Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders

Agroforestry projects have the potential to help mitigate global warming by acting as sinks for greenhouse gasses. However, participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by analysing the implications of transaction and abatement costs in carbon-sequestration projects. A model of project participation is developed, which accounts for the conditions under which both buyers and sellers would be willing to engage in a carbon transaction that involves a long-term commitment. The model is used to identify critical project-design variables (minimum project size, farm price of carbon, minimum area of participating farms). A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the transaction costs imposed by the Clean Development Mechanism of the Kyoto Protocol affect project feasibility