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
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.
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- 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.
- 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.
- 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.
- 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.
- 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).
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