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Analysis of the carbon sequestration costs of afforestation and reforestation agroforestry practices and the use of cost curves to evaluate their potential for implementation of climate change mitigation

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  • Torres, Arturo Balderas
  • Marchant, Rob
  • Lovett, Jon C.
  • Smart, James C.R.
  • Tipper, Richard

Abstract

Carbon sequestration in forest sinks is an important strategy to remove greenhouse gases and to mitigate climate change; however its implementation has been limited under the Clean Development Mechanism of the Kyoto Protocol which has not created the incentives for widespread implementation. The objective of this paper is to analyze the sequestration costs of agroforestry afforestation and reforestation projects (ARPs) following a partial market equilibrium using average cost curves and economic break even analysis to identify the supply costs. The modelling done in this work contrasts the voluntary and clean development mechanism transaction costs. Data is based on the voluntary project, Scolel Té, being implemented in Mexico. Cost curves are developed for seven different sequestration options considering transaction and implementation costs; information from agricultural production in Chiapas Mexico is used to integrate opportunity costs of two agroforestry practices suggesting that sequestration costs may follow a "U" shape, with an initial reduction due to economies of scale and a subsequent increase caused by high opportunity costs. The widespread implementation of agroforestry options not requiring complete land conversion (e.g. living fences and coffee under shade) might be cost effective strategies not generating high opportunity costs. Results also suggest that payments in the early years of the project and lower transaction costs favour the development of ARPs in the voluntary market especially in marginal rural areas with high discount rates.

Suggested Citation

  • Torres, Arturo Balderas & Marchant, Rob & Lovett, Jon C. & Smart, James C.R. & Tipper, Richard, 2010. "Analysis of the carbon sequestration costs of afforestation and reforestation agroforestry practices and the use of cost curves to evaluate their potential for implementation of climate change mitigat," Ecological Economics, Elsevier, vol. 69(3), pages 469-477, January.
  • Handle: RePEc:eee:ecolec:v:69:y:2010:i:3:p:469-477
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    References listed on IDEAS

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    1. van Kooten, G. Cornelis & Wang, Yichuan & Laaksonen-Craig, Susanna, 2007. "Carbon Sequestration in Forest Ecosystems as a Strategy for Mitigating Climate Change," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9931, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. De Jong, Ben H. J. & Tipper, Richard & Montoya-Gomez, Guillermo, 2000. "An economic analysis of the potential for carbon sequestration by forests: evidence from southern Mexico," Ecological Economics, Elsevier, vol. 33(2), pages 313-327, May.
    3. Darius M. Adams & Ralph J. Alig & DBruce A. McCarl & John M. Callaway & Steven M. Winnett, 1999. "Minimum Cost Strategies for Sequestering Carbon in Forests," Land Economics, University of Wisconsin Press, vol. 75(3), pages 360-374.
    4. Kenneth Richards & Krister Andersson, 2001. "The leaky sink: persistent obstacles to a forest carbon sequestration program based on individual projects," Climate Policy, Taylor & Francis Journals, vol. 1(1), pages 41-54, March.
    5. Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
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    Cited by:

    1. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
    2. De Pinto, Alessandro & Robertson, Richard D. & Obiri, Beatrice Darko, 2013. "Adoption of climate change mitigation practices by risk-averse farmers in the Ashanti Region, Ghana," Ecological Economics, Elsevier, vol. 86(C), pages 47-54.
    3. Chadourne, Matthew H. & Cho, Seong-Hoon & Roberts, Roland K., 2011. "Ridge, Slope, and Hillside Protection Taskforce Projects in Knox County, Tennessee: Costs and Benefits of Reforestation of Target Areas," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103846, Agricultural and Applied Economics Association.
    4. repec:spr:masfgc:v:22:y:2017:i:7:d:10.1007_s11027-016-9716-x is not listed on IDEAS
    5. repec:wsi:jeapmx:v:19:y:2017:i:02:n:s1464333217500065 is not listed on IDEAS
    6. Kim, Man-Keun & Peralta, Denis & McCarl, Bruce A., 2014. "Land-based greenhouse gas emission offset and leakage discounting," Ecological Economics, Elsevier, vol. 105(C), pages 265-273.
    7. Hari Dulal & Gernot Brodnig & Kalim Shah, 2011. "Capital assets and institutional constraints to implementation of greenhouse gas mitigation options in agriculture," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(1), pages 1-23, January.
    8. Eike Luedeling & Henry Neufeldt, 2012. "Carbon sequestration potential of parkland agroforestry in the Sahel," Climatic Change, Springer, vol. 115(3), pages 443-461, December.
    9. Allwardt, Jennifer, 2011. "Carbon Credit Payment Options for Agroforestry Projects in Africa," Graduate Research Masters Degree Plan B Papers 118497, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    10. Eric Rahn & Peter Läderach & María Baca & Charlotte Cressy & Götz Schroth & Daniella Malin & Henk Rikxoort & Jefferson Shriver, 2014. "Climate change adaptation, mitigation and livelihood benefits in coffee production: where are the synergies?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(8), pages 1119-1137, December.
    11. De Pinto, Alessandro & Li, Man & Haruna, Akiko & Hyman, Glenn Graham & Martinez, Mario Andrés Londoño & Creamer, Bernardo & Kwon, Ho-Young & Garcia, Jhon Brayan Valencia & Tapasco, Jeimar & Martinez, , 2016. "Low Emission Development Strategies in Agriculture. An Agriculture, Forestry, and Other Land Uses (AFOLU) Perspective," World Development, Elsevier, vol. 87(C), pages 180-203.
    12. 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.
    13. Emily Anderson & Hisham Zerriffi, 2012. "Seeing the trees for the carbon: agroforestry for development and carbon mitigation," Climatic Change, Springer, vol. 115(3), pages 741-757, December.
    14. Moss, Jonathan & Cacho, Oscar J., 2014. "Farm-scale analysis of the potential uptake of carbon offset activities," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 187402, New Zealand Agricultural and Resource Economics Society.
    15. Loretta Gratani & Laura Varone & Carlo Ricotta & Rosangela Catoni, 2013. "Mediterranean shrublands carbon sequestration: environmental and economic benefits," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 18(8), pages 1167-1182, December.
    16. Skutsch, Margaret & Balderas Torres, Arturo & Carrillo Fuentes, Juan Carlos, 2017. "Policy for pro-poor distribution of REDD+ benefits in Mexico: How the legal and technical challenges are being addressed," Forest Policy and Economics, Elsevier, vol. 75(C), pages 58-66.
    17. Bryan, Elizabeth & De Pinto, Alessandro & Ringler, Claudia & Asuming-Brempong, Samuel & Bendaoud, Luís Artur & Givá, Nicia & Anh, Dao The & Mai, Nguyen Ngoc & Asenso-Okyere, Kwadwo & Sarpong, Daniel, 2012. "Institutions for agricultural mitigation: Potential and challenges in four countries," CAPRi working papers 107, International Food Policy Research Institute (IFPRI).
    18. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.

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