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Alternative use systems for the remaining Ethiopian cloud forest and the role of Arabica coffee — A cost-benefit analysis

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  • Reichhuber, Anke
  • Requate, Till

Abstract

This paper presents a cost-benefit analysis of three different use systems for the remaining cloud forests in Ethiopia, which at present are being depleted at the rate of 8% per year. These use systems are a) traditional conversion to crop land, b) sustainable management of the forest (e.g. by growing high-quality, semi-forest coffee), and c) strict conservation. We find that under business as usual conversion to cropland yields the highest net present income value for the local population. Taking into account watershed services, sustainable forest use is in the best interests of the country for discount rates of 10% or lower. Taking into account the global benefits of biodiversity conservation and carbon storage, sustainable forest management also yields the highest total economic value while strict conservation does not pass a cost-benefit test even at a discount rate of 3%.

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  • Reichhuber, Anke & Requate, Till, 2012. "Alternative use systems for the remaining Ethiopian cloud forest and the role of Arabica coffee — A cost-benefit analysis," Ecological Economics, Elsevier, vol. 75(C), pages 102-113.
    • Handle: RePEc:eee:ecolec:v:75:y:2012:i:c:p:102-113
    DOI: 10.1016/j.ecolecon.2012.01.006
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    2. Narita, Daiju & Lemenih, Mulugeta & Shimoda, Yukimi & Ayana, Alemayehu N., 2018. "Economic Accounting of Ethiopian Forests: A Natural Capital Approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 97, pages 189-200.
    3. Viteri-Salazar, Oswaldo & Toledo, Lucía, 2020. "The expansion of the agricultural frontier in the northern Amazon region of Ecuador, 2000–2011: Process, causes, and impact," Land Use Policy, Elsevier, vol. 99(C).
    4. Tamagn Woyesa & Satinder Kumar, 2021. "Potential of coffee tourism for rural development in Ethiopia: a sustainable livelihood approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 815-832, January.
    5. Luca Di Corato & Tsegaye Ginbo, 2020. "Climate change and coffee farm relocation in Ethiopia: a real-options approach," Working Papers 2020:02, Department of Economics, University of Venice "Ca' Foscari".
    6. Narita, Daiju & Lemenih, Mulugeta & Shimoda, Yukimi & Ayana, Alemayehu N., 2017. "Toward an Accounting of the Values of Ethiopian Forests as Natural Capital," Working Papers 140, JICA Research Institute.
    7. Narita, Daiju & Lemenih, Mulugeta & Shimoda, Yukimi & Ayana, Alemayehu N., 2018. "Economic accounting of ethiopian forests: A natural capital approach," Forest Policy and Economics, Elsevier, vol. 97(C), pages 189-200.

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