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Trade-offs between ecosystem services: Water and carbon in a biodiversity hotspot

  • Chisholm, Ryan A.
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    Carbon sequestration by afforestation can help mitigate global climate change but may have adverse environmental and economic impacts in some regions. For example, economic incentives for carbon sequestration may encourage the expansion of Pinus radiata timber plantations in the Fynbos biome of South Africa, with negative consequences for water supply and biodiversity. I built a dynamic ecological-economic model to investigate whether afforestation of a Fynbos catchment with Pinus radiata is economically viable when the potential benefits of carbon sequestration and timber production are balanced against the losses to water supply. I found that afforestation appears viable to the forestry industry under current water tariffs and current carbon accounting legislation, but would appear unviable if the forestry industry were to pay the true cost of water used by the plantations. I also found that under various plausible future economic scenarios, afforestation can be associated with either large future economic gains or losses, suggesting a need for future analyses based on branches of decision theory that deal with severe uncertainty. I conclude with a general recommendation that climate legislation should be explicit about the conditions under which afforestation for carbon sequestration of native vegetation is a legitimate climate mitigation strategy.

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    File URL: http://www.sciencedirect.com/science/article/B6VDY-50B0K2W-1/2/a286acf3f8314e7b050e2db832416c2c
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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 69 (2010)
    Issue (Month): 10 (August)
    Pages: 1973-1987

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    Handle: RePEc:eee:ecolec:v:69:y:2010:i:10:p:1973-1987
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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    1. Caparros, Alejandro & Jacquemont, Frederic, 2003. "Conflicts between biodiversity and carbon sequestration programs: economic and legal implications," Ecological Economics, Elsevier, vol. 46(1), pages 143-157, August.
    2. S. Paltsev & J. Reilly & H. Jacoby & A. Gurgel & G. Metcalf & A. Sokolov & J. Holak, 2007. "Assessment of U.S. Cap-and-Trade Proposals," Working Papers 0705, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    3. Turpie, J.K. & Marais, C. & Blignaut, J.N., 2008. "The working for water programme: Evolution of a payments for ecosystem services mechanism that addresses both poverty and ecosystem service delivery in South Africa," Ecological Economics, Elsevier, vol. 65(4), pages 788-798, May.
    4. Alejandro Caparrós & Emilio Cerdá & Paola Ovando & Pablo Campos, 2010. "Carbon Sequestration with Reforestations and Biodiversity-scenic Values," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(1), pages 49-72, January.
    5. Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
    6. Currie, Bianca & Milton, Suzanne J. & Steenkamp, J.C., 2009. "Cost-benefit analysis of alien vegetation clearing for water yield and tourism in a mountain catchment in the Western Cape of South Africa," Ecological Economics, Elsevier, vol. 68(10), pages 2574-2579, August.
    7. 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.
    8. Martin L. Weitzman, 2001. "Gamma Discounting," American Economic Review, American Economic Association, vol. 91(1), pages 260-271, March.
    9. 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.
    10. Turpie, Jane K., 2003. "The existence value of biodiversity in South Africa: how interest, experience, knowledge, income and perceived level of threat influence local willingness to pay," Ecological Economics, Elsevier, vol. 46(2), pages 199-216, September.
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