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Bioeconomic meta-modelling of Indonesian agroforests as carbon sinks

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  • Wise, Russell M.
  • Cacho, Oscar J.

Abstract

In many areas of developing countries, economic and institutional factors often combine to give farmers incentives to clear forests and repeatedly plant food crops without sufficiently replenishing the soils. These activities lead to large-scale land degradation and contribute to global warming through the release of greenhouse gases into the atmosphere. We investigate whether agroforestry systems might alleviate these trends when carbon-credit payments are available under the Clean Development Mechanism of the Kyoto Protocol. A meta-modelling framework is adopted, comprising an econometric-production model of a smallholding in Sumatra. The model is used within a dynamic-programming algorithm to determine optimal combinations of tree/crop area, tree-rotation length, and firewood harvest. Results show the influence of soil-carbon stocks and discount rates on optimal strategies and reveal interesting implications for joint management of agriculture and carbon.

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Bibliographic Info

Paper provided by Australian Agricultural and Resource Economics Society in its series 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia with number 6772.

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Date of creation: 2008
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Handle: RePEc:ags:aare08:6772

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Keywords: bio-economic meta-modelling; Indonesia; agroforestry; carbon credits; dynamic programming; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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  1. Hartman, Richard, 1976. "The Harvesting Decision When a Standing Forest Has Value," Economic Inquiry, Western Economic Association International, vol. 14(1), pages 52-58, March.
  2. Cacho, Oscar J. & Hean, Robyn L. & Wise, Russell M., 2003. "Carbon-accounting methods and reforestation incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), June.
  3. Cacho, Oscar J. & Marshall, Graham R. & Milne, Mary, 2005. "Transaction and abatement costs of carbon-sink projects in developing countries," Environment and Development Economics, Cambridge University Press, vol. 10(05), pages 597-614, October.
  4. Gutrich, John & Howarth, Richard B., 2007. "Carbon sequestration and the optimal management of New Hampshire timber stands," Ecological Economics, Elsevier, vol. 62(3-4), pages 441-450, May.
  5. Bowes, Michael D. & Krutilla, John V., 1985. "Multiple use management of public forestlands," Handbook of Natural Resource and Energy Economics, in: A. V. Kneeseā€  & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 2, chapter 12, pages 531-569 Elsevier.
  6. Fearnside, Philip M., 2001. "Saving tropical forests as a global warming countermeasure: an issue that divides the environmental movement," Ecological Economics, Elsevier, vol. 39(2), pages 167-184, November.
  7. Paul M. Comolli, 1981. "Principles and Policy in Forestry Economics," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 300-309, Spring.
  8. Oscar Cacho & Russell Wise & Kenneth MacDicken, 2004. "Carbon Monitoring Costs and their Effect on Incentives to Sequester Carbon through Forestry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 9(3), pages 273-293, July.
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