Mitigation Potential and Costs of Avoided Deforestation

Transcription

1 Mitigation Potential and Costs of Avoided Deforestation Presented by Brent Sohngen, The Ohio State University Robert Beach, RTI International Presented at Fourth USDA GHG Conference: Positioning Agriculture and Forestry to Meet the Challenges of Climate Change February 6-8, 2007 Baltimore, Maryland 3040 Cornwallis Road P.O. Box Research Triangle Park, NC Phone Fax RTI International is a trade name of Research Triangle Institute

2 Tropical Deforestation as a Source of GHG Emissions Forest removals for shifting cultivation and selective logging, as well as permanent forestland conversion to agricultural or other uses, contribute to releases of C stored in vegetation and soils to the atmosphere Our focus is net deforestation Tropical deforestation accounts for as much as 25% of global anthropogenic emissions (Houghton, 2005) Emissions depend on: Rate of deforestation Change in C stock/ha Use of removed forest biomass (e.g., burning vs. slow decay) 2

3 Study Overview Large potential for emissions reductions from reducing tropical deforestation Heightened interest recently in providing incentives for avoided deforestation Not currently eligible projects under CDM Few existing studies have examined marginal abatement costs across multiple tropical regions Important to assess technical and economic mitigation potential to assess possible role in GHG abatement portfolios This study uses a market model, the Global Timber Model, to quantify potential emissions reductions and costs for 4 tropical regions 3

4 Change in Forest Cover Total Forest Cover (1 000 ha) Region Change in Forest Cover, Annual Annual Rate Change of Change (1 000 ha) (%/year) Change in Forest Cover, Annual Annual Rate Change of Change (1 000 ha) (%/year) Africa % % Asia % % East Asia % % SE & S Asia % % W & C Asia % % Central America % % Europe % % North America % % Oceania % % South America % % Total % % 4

5 Deforestation and Carbon Emissions Carbon consequences of these relatively large changes in forest cover are substantial Net loss in forest cover Lower carbon density in newly afforested or reforested stands than mature stands being deforested Tropical regions experiencing net deforestation have higher average carbon density than temperate regions experiencing net afforestation (FAO, 2005): North America: tc/ha Central America: tc/ha South America: tc/ha Previous estimates of about 1-2 billion tons annual C emissions due to tropical deforestation 5

6 Methods Global Timber Model Timber market and land use model that accounts for changes in carbon stock Dynamic optimization model that maximizes NPV of consumer surplus less costs of managing, harvesting and holding forests Global demand for timber logs 250 forest supply regions meet this global demand Age class distributions and biomass growth functions developed for all forest types Cost functions developed for both accessible and remote forests Land supply functions 6

7 Baseline Simulation of Future Land Use Change in Tropical Regions Million ha/yr Africa Deforestation Africa Net Change SA Deforestation SA Net Change SEA Deforestation SEA Net Change CA Deforestation CA Net Change Results for Year Deforestation C loss Million ha/yr Million t C/yr South America Central America SE Asia Africa Total

8 Incorporating Carbon Prices To implement scenarios with non-zero C prices, we assumed C gained above baseline is rented at an annual rate of: R C = r*p C, where r is interest rate and P C is C price C price assumed constant over time For analyses presented, all C gains are included Land use change (reduced deforestation and afforestation) Management intensity Rotation age Product storage Focus on four regions where deforestation is largest 8

9 Reduction in Average Annual Deforestation Rate, Carbon Price ($/tc) Region $5 $10 $20 $50 $100 Africa -15.3% -28.0% -43.9% -78.0% -97.4% Central America -17.7% -39.3% -65.2% -83.0% -94.7% South America -8.4% -16.2% -28.9% -62.3% % Southeast Asia -9.8% -18.9% -34.1% -69.8% -96.4% Total -14.0% -28.3% -47.0% -76.7% -98.1% 9

10 How Much May C Incentives Reduce Deforestation? Million ha/yr 5 Annual Deforestation South America Baseline $10/tC $5/tC $20/tC 4 $50/tC $100/tC Year Note: All Carbon Prices, Pc, are assumed to be constant over time 10

11 Effects of C Incentives In baseline, tropical deforestation is simulated to lead to around 55.7 billon tc cumulative loss from For $5/tC, this could be reduced to a loss of about 50.4 billion tc (5.3 billion tc gain relative to baseline by 2055) At higher prices, C emissions are reduced farther At $50/tC, most losses are avoided Some deforestation still occurs, but net losses are fairly small For $100/tC, forest areas rise by million ha and carbon storage by around 76 billion tc relative to baseline conditions 11

12 Abatement Cost Curves for Avoided Deforestation $100 $90 $80 $70 $60 $/t C $50 $40 $30 $20 $10 $0 Central America Africa South America SE Asia Million t C per year (Annual Equiv. Amt.; r=5%) 12

13 What Do These C Prices Mean On the Ground (Rental Payments per ha)? Carbon Price ($/tc) Region $5 $10 $20 $50 $100 South America $29.84 $59.68 $ $ $ (3.17, 34.13) (6.35, 68.27) (12.72, ) (31.92, ) (64.2, 682.7) Central America $23.22 (3.19, 33.46) Southeast Asia $32.93 (3.06, 61.21) Africa $24.97 (3.18, 29.92) $46.44 (6.39, 66.93) $65.87 (6.13, ) $49.94 (6.37, 59.85) Estimates assume an efficient program Leakage could be large $92.96 (12.81, ) $ (12.3, ) $99.9 (12.78, ) Note: Range in rental payments across forest types in parentheses $ (32.2, ) $ (30.88, ) $ (32.22, ) $ (64.91, ) $ (62.83, ) $ (66.42, ) Ex: 50% leakage, may reduce all payments by 50%. 13

14 Supply Curve for Reducing Deforestation ( ) $100 $80 $60 Points on the curves Are $5, $10, $20, $50, and $100 /tc $/tc $40 $20 $ Reduction in Deforestation (Million ha/yr) Central America SE Asia South America Africa 14

15 Conclusions One of the first studies to consider how different carbon prices will affect potential levels of deforestation in tropical countries over time Results indicate there is large potential for avoided deforestation globally $100/tC would virtually eliminate deforestation Net cumulative gain of 76 billion tc through 2055 (an average of about 1.5 billion tc/year) and 422 million ha of forests Largest gains in SE Asia (almost 30 billion tc), followed by South America (22 billion tc), Africa (19 billion tc), and Central America (6 billion tc) However, this is an extremely large sum of money Based on the average carbon per hectare in tropical forests today, policy makers, or traders in the carbon market, would have to pay $465 to $660 per hectare per year to ensure that land does not convert to agriculture Across the four regions considered above Southeast Asia, South America, Africa, and Central America the total costs of reducing deforestation would be $2.5 trillion at the $100/tC price 15

16 Conclusions (2) At $5/tC, about 3 million additional ha of forest and 5 billion tc by 2055 (average of about 100 million tc per year) At $10/tC, about 147 million additional ha of forest and 12 billion tc by 2055 (average of about 240 million tc per year) Results assume overall changes in regional carbon stock can be measured and do not account for monitoring costs Primary approach for incorporating forestry into global climate change policy is project-based. Must account for: Additionality to baseline Permanence Leakage Incorporating these factors would raise the cost of C sequestration relative to those in the analyses presented. 16

17 Future Research/Extensions Alternative baseline specifications Accounting for forest degradation Additional heterogeneity for carbon densities Interactions with agricultural markets (e.g., endogeneity of agricultural prices) Further regional disaggregation 17