IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v21y2012icp108-117.html
   My bibliography  Save this article

How attractive are short-term CDM forestations in arid regions? The case of irrigated croplands in Uzbekistan

Author

Listed:
  • Djanibekov, Utkur
  • Khamzina, Asia
  • Djanibekov, Nodir
  • Lamers, John P.A.

Abstract

This study analyzed the financial attractiveness of Clean Development Mechanism Afforestation and Reforestation (CDM A/R) in irrigated agricultural settings. The Net Present Value (NPV) and Internal Rate of Return (IRR) of CDM A/R were estimated by analyzing the case of Khorezm region in Uzbekistan, where a mixed-species tree plantation was established on marginal cropland. The dual purposes of carbon sequestration and production of fruits, leaves as fodder, and fuelwood were studied over a seven-year rotation period. We compared the opportunity costs of land in marginal agricultural areas between this short-rotation plantation forestry and the annual cultivation of the major crops in the region, i.e., cotton, winter wheat, rice, and maize. The analyses were performed considering different levels of irrigation water availability, from 0 to 30,000m3/ha, to reflect the reality of a high variability of water supply in the region. The NPV of CDM A/R ranged between 724 and 5794USD/ha over seven years, depending on the tree species. Among the latter, Elaeagnus angustifolia L. had the highest profits due to the annually recurring cash flows generated from fruit production. Temporary Certified Emission Reductions (tCER) ranged within 399–702USD/ha after the assumed 7-year crediting period and would not suffice to cover initial investments and management costs of tree plantations. IRR peaked at 65% with E. angustifolia under the conventional afforestation and measured −10% and 61% when considering only the tCER and the CDM A/R, respectively. In contrast, other species had higher IRRs in case of the CDM A/R. The total profits from tree plantations exceeded those of both cotton and winter wheat, even with the assumption that there was an optimal irrigation supply for these crops. Rice production was overall the most profitable land use option but required water input of 26,500m3/ha/year, which is not consistently available for marginal croplands. We argue that the current global average price of 4.76 USD/tCER is insufficient to initiate forestry-based CDM projects but, in the absence of other incentives, can still motivate forestation of degraded croplands for land rehabilitation and the provisioning of non-timber products. Given the low irrigation needs of trees, 3–30% of the crop water demand, a conversion of degraded cropland to forested areas could save up to 15,300m3/ha/year at the current tCER price. Combining the monetary value of water and carbon would enlarge the scope for CDM A/R in irrigated drylands, thus enhancing the investments in marginal land rehabilitation and strengthening the resilience of rural populations to the repercussions of climate change.

Suggested Citation

  • Djanibekov, Utkur & Khamzina, Asia & Djanibekov, Nodir & Lamers, John P.A., 2012. "How attractive are short-term CDM forestations in arid regions? The case of irrigated croplands in Uzbekistan," Forest Policy and Economics, Elsevier, vol. 21(C), pages 108-117.
    • Handle: RePEc:eee:forpol:v:21:y:2012:i:c:p:108-117
    DOI: 10.1016/j.forpol.2012.01.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934112000081
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2012.01.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. G. Cornelis Kooten, 2000. "Economic Dynamics of Tree Planting for Carbon Uptake on Marginal Agricultural Lands," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(1), pages 51-65, March.
    2. Olschewski, Roland & Benitez, Pablo C., 2005. "Secondary forests as temporary carbon sinks? The economic impact of accounting methods on reforestation projects in the tropics," Ecological Economics, Elsevier, vol. 55(3), pages 380-394, November.
    3. Creedy, John & Wurzbacher, Anke D., 2001. "The economic value of a forested catchment with timber, water and carbon sequestration benefits," Ecological Economics, Elsevier, vol. 38(1), pages 71-83, July.
    4. Benitez, Pablo C. & Obersteiner, Michael, 2006. "Site identification for carbon sequestration in Latin America: A grid-based economic approach," Forest Policy and Economics, Elsevier, vol. 8(6), pages 636-651, August.
    5. Croitoru, Lelia, 2007. "Valuing the non-timber forest products in the Mediterranean region," Ecological Economics, Elsevier, vol. 63(4), pages 768-775, September.
    6. Michaelowa, Axel & Stronzik, Marcus, 2002. "Transaction costs of the Kyoto mechanisms," HWWA Discussion Papers 175, Hamburg Institute of International Economics (HWWA).
    7. Peter J. Parks & Ian W. Hardie, 1995. "Least-Cost Forest Carbon Reserves: Cost-Effective Subsidies to Convert Marginal Agricultural Land to Forests," Land Economics, University of Wisconsin Press, vol. 71(1), pages 122-136.
    8. Olschewski, Roland & Benítez, Pablo C., 2010. "Optimizing joint production of timber and carbon sequestration of afforestation projects," Journal of Forest Economics, Elsevier, vol. 16(1), pages 1-10, January.
    9. Marechal, Kevin & Hecq, Walter, 2006. "Temporary credits: A solution to the potential non-permanence of carbon sequestration in forests?," Ecological Economics, Elsevier, vol. 58(4), pages 699-716, July.
    10. Meenakshi Kaul & G. Mohren & V. Dadhwal, 2010. "Carbon storage versus fossil fuel substitution: a climate change mitigation option for two different land use categories based on short and long rotation forestry in India," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(4), pages 395-409, April.
    11. Michaelowa, Axel & Stronzik, Marcus, 2002. "Transaction Costs of the Kyoto Mechanisms," Discussion Paper Series 26284, Hamburg Institute of International Economics.
    12. Nodir DJANIBEKOV, 2008. "A Micro-Economic Analysis of Farm Restructuring in Khorezm Region, Uzbekistan," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 19-24.
    13. Olschewski, Roland & Benítez, Pablo C. & de Koning, G.H.J. & Schlichter, Tomás, 2005. "How attractive are forest carbon sinks? Economic insights into supply and demand of Certified Emission Reductions," Journal of Forest Economics, Elsevier, vol. 11(2), pages 77-94, September.
    14. Guitart, A. Bussoni & Rodriguez, L.C. Estraviz, 2010. "Private valuation of carbon sequestration in forest plantations," Ecological Economics, Elsevier, vol. 69(3), pages 451-458, January.
    15. Gregmar Galinato & Shinsuke Uchida, 2010. "Evaluating Temporary Certified Emission Reductions in Reforestation and Afforestation Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(1), pages 111-133, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Djanibekov, Utkur & Finger, Robert, 2015. "The effects of variability under farm land consolidation process: A perspective of cotton-growing farmers in Uzbekistan," 2015 Conference, August 9-14, 2015, Milan, Italy 211829, International Association of Agricultural Economists.
    2. Djanibekov, Utkur & Khamzina, Asia & Villamor, Grace B. & Lamers, John P.A., 2013. "Economic analysis of afforestation of marginal croplands in Uzbekistan," International Conference and Young Researchers Forum - Natural Resource Use in Central Asia: Institutional Challenges and the Contribution of Capacity Building 159089, University of Giessen (JLU Giessen), Center for International Development and Environmental Research.
    3. Marina Vladimirovna Vlasenko & Ludmila Petrovna Rybashlykova & Svetlana Yurievna Turko, 2022. "Restoration of Degraded Lands in the Arid Zone of the European Part of Russia by the Method of Phytomelioration," Agriculture, MDPI, vol. 12(3), pages 1-22, March.
    4. Anton, Strokov & Irina, Poleshkina, 2016. "Экономическая Оценка Экосистемных Услуг В Тавушской Области Республики Армения," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    5. Djanibekov, Nodir & Sommer, Rolf & Djanibekov, Utkur, 2013. "Evaluation of effects of cotton policy changes on land and water use in Uzbekistan: Application of a bio-economic farm model at the level of a water users association," Agricultural Systems, Elsevier, vol. 118(C), pages 1-13.
    6. Mirzabaev, A. & Strokov, A. & Krasilnikov, P., 2018. "The impact of land degradation on agricultural profits and poverty in Central Asia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277449, International Association of Agricultural Economists.
    7. Sunderasan Srinivasan, 2015. "Economic valuation and option-based payments for ecosystem services," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1055-1077, October.
    8. Jin, Ming & Han, Xulong & Li, Mingyu, 2023. "Trade-offs of multiple urban ecosystem services based on land-use scenarios in the Tumen River cross-border area," Ecological Modelling, Elsevier, vol. 482(C).
    9. Djanibekov, Utkur & Djanibekov, Nodir & Khamzina, Asia, 2012. "CDM afforestation for managing water, energy and rural income nexus in irrigated drylands," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126765, International Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hou, Guolong & Delang, Claudio O. & Lu, Xixi & Olschewski, Roland, 2020. "Optimizing rotation periods of forest plantations: The effects of carbon accounting regimes," Forest Policy and Economics, Elsevier, vol. 118(C).
    2. Köthke, Margret & Dieter, Matthias, 2010. "Effects of carbon sequestration rewards on forest management--An empirical application of adjusted Faustmann Formulae," Forest Policy and Economics, Elsevier, vol. 12(8), pages 589-597, October.
    3. Gren, Ing-Marie & Zeleke, Abenezer Aklilu, 2016. "Policy design for forest carbon sequestration: A review of the literature," Forest Policy and Economics, Elsevier, vol. 70(C), pages 128-136.
    4. Couture, Stéphane & Reynaud, Arnaud, 2011. "Forest management under fire risk when forest carbon sequestration has value," Ecological Economics, Elsevier, vol. 70(11), pages 2002-2011, September.
    5. Christopher Galik & Brian Murray & Stephen Mitchell & Phil Cottle, 2016. "Alternative approaches for addressing non-permanence in carbon projects: an application to afforestation and reforestation under the Clean Development Mechanism," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 21(1), pages 101-118, January.
    6. Miettinen, Jenni & Ollikainen, Markku & Nieminen, Tiina M. & Ukonmaanaho, Liisa & Laurén, Ari & Hynynen, Jari & Lehtonen, Mika & Valsta, Lauri, 2014. "Whole-tree harvesting with stump removal versus stem-only harvesting in peatlands when water quality, biodiversity conservation and climate change mitigation matter," Forest Policy and Economics, Elsevier, vol. 47(C), pages 25-35.
    7. Olschewski, Roland & Benítez, Pablo C., 2010. "Optimizing joint production of timber and carbon sequestration of afforestation projects," Journal of Forest Economics, Elsevier, vol. 16(1), pages 1-10, January.
    8. Juutinen, Artti & Ahtikoski, Anssi & Lehtonen, Mika & Mäkipää, Raisa & Ollikainen, Markku, 2018. "The impact of a short-term carbon payment scheme on forest management," Forest Policy and Economics, Elsevier, vol. 90(C), pages 115-127.
    9. Wan-Yu Liu & Qunwei Wang, 2016. "Optimal pricing of the Taiwan carbon trading market based on a demand–supply model," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(1), pages 209-242, November.
    10. Mitsutsune Yamaguchi, 2005. "CDM potential in the power-generation and energy-intensive industries of China," Climate Policy, Taylor & Francis Journals, vol. 5(2), pages 167-184, March.
    11. Ryuji Matsuhashi & Yutaka Momobayashi & Hisashi Ishitani, 2002. "Feasibility study on a CDM project utilizing photovoltaic systems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(2), pages 105-119, June.
    12. van Kooten, G. Cornelis & Laaksonen-Craig, Susanna & Wang, Yichuan, 2007. "Costs of Creating Carbon Offset Credits via Forestry Activities: A Meta-Regression Analysis," Working Papers 37039, University of Victoria, Resource Economics and Policy.
    13. Greiner, Sandra & Michaelowa, Axel, 2003. "Defining Investment Additionality for CDM projects--practical approaches," Energy Policy, Elsevier, vol. 31(10), pages 1007-1015, August.
    14. Gregmar I. Galinato & Aaron Olanie & Shinsuke Uchida & Jonathan K. Yoder, 2011. "Long‐term versus temporary certified emission reductions in forest carbon sequestration programs," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 537-559, October.
    15. Benitez, Pablo C. & Obersteiner, Michael, 2006. "Site identification for carbon sequestration in Latin America: A grid-based economic approach," Forest Policy and Economics, Elsevier, vol. 8(6), pages 636-651, August.
    16. Khalil Helioui, 2006. "Coordination internationale des politiques climatiques : quelle efficacité ?," Working Papers hal-00866433, HAL.
    17. Saowalak Roongtawanreongsri & Prakart Sawangchote & Sara Bumrungsri & Chaisri Suksaroj, 2016. "Economic Benefit of Management Options for a Suburban Forest in South Thailand," EEPSEA Research Report rr20160341, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2016.
    18. Khalil, Helioui & Cohen, Claude & Salem Szklo, Alexandre, 2006. "How to use the clean development mechanism in the residential sector? The case of Brazilian refrigerators," Energy Policy, Elsevier, vol. 34(15), pages 2150-2160, October.
    19. Ryuji Matsuhashi & Yutaka Momobayashi & Hisashi Ishitani, 2002. "Feasibility study on a CDM project utilizing photovoltaic systems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(2), pages 105-119, June.
    20. Wang, Zhi, 2003. "WTO Accession, "Greater China" Free Trade Area and Economic Integration across the Taiwan Strait," Conference papers 331126, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:21:y:2012:i:c:p:108-117. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.