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Assessing the Opportunity Cost of Carbon Stock Caused by Land-Use Changes in Taiwan

Author

Listed:
  • Ming-Yun Chu

    (Department of Forestry, National Chung Hsing University, Taichung City 40227, Taiwan)

  • Wan-Yu Liu

    (Department of Forestry, National Chung Hsing University, Taichung City 40227, Taiwan
    Innovation and Development Center of Sustainable Agriculture, National Chung Hsing University, Taichung City 40227, Taiwan)

Abstract

As compared with conventional approaches for reducing carbon emissions, the strategies of reducing emissions from deforestations and forest degradation (REDD) can greatly reduce costs. Hence, the United Nations Framework Convention on Climate Change regards the REDD strategies as a crucial approach to mitigate climate change. To respond to climate change, Taiwan passed the Greenhouse Gas Reduction and Management Act to control the emissions of greenhouse gases. In 2021, the Taiwan government has announced that it will achieve the carbon neutrality target by 2050. Accordingly, starting with focusing on the carbon sink, the REDD strategies have been considered a recognized and feasible strategy in Taiwan. This study analyzed the net present value and carbon storage for various land-use types to estimate the carbon stock and opportunity cost of land-use changes. When the change of agricultural land to artificial forests generated carbon stock, the opportunity cost of carbon stock was negative. Contrarily, restoring artificial forests (which refer to a kind of forest that is formed through artificial planting, cultivation, and conservation) to agricultural land would generate carbon emissions, but create additional income. Since the opportunity cost of carbon storage needs to be lower than the carbon market price so that landlords have incentives to conduct REDD+, the outcomes of this study can provide a reference for the government to set an appropriate subsidy or price for carbon sinks. It is suggested that the government should offer sufficient incentives to reforest collapsed land, and implement interventions, promote carbon trading policies, or regulate the development of agricultural land so as to maintain artificial broadleaf forests for increased carbon storage.

Suggested Citation

  • Ming-Yun Chu & Wan-Yu Liu, 2021. "Assessing the Opportunity Cost of Carbon Stock Caused by Land-Use Changes in Taiwan," Land, MDPI, vol. 10(11), pages 1-15, November.
    • Handle: RePEc:gam:jlands:v:10:y:2021:i:11:p:1240-:d:677926
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    References listed on IDEAS

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    1. Yang, Hongqiang & Li, Xi, 2018. "Potential variation in opportunity cost estimates for REDD+ and its causes," Forest Policy and Economics, Elsevier, vol. 95(C), pages 138-146.
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    3. Pagiola, Stefano & Bosquet, Benoit, 2009. "Estimating the costs of REDD at the country level," MPRA Paper 13726, University Library of Munich, Germany.
    4. Nicholas Stern, 2008. "The Economics of Climate Change," American Economic Review, American Economic Association, vol. 98(2), pages 1-37, May.
    5. Guo, Jinggang & Gong, Peichen, 2017. "The potential and cost of increasing forest carbon sequestration in Sweden," Journal of Forest Economics, Elsevier, vol. 29(PB), pages 78-86.
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