Opportunity Costs of Avoided Deforestation with Sustainable Benefits
Countries interested in developing and implementing strategies for Reduced Emissions from Deforestation and Forest Degradation (REDD) need to consider a number of important issues, including the opportunity costs of foregoing the conversion of forests into alternative land uses and foregoing some types of forest extraction. Good understanding of opportunity costs – and the factors that shape opportunity costs – is an important element of well-grounded REDD strategies. Large-scale and nationwide assessments of opportunity costs make it possible to generate estimates of the payments that would be needed to provide land users with sufficient incentive to reduce deforestation.
In 2007/8, the ASB partners in Indonesia, Philippines, Cameroon and Peru built on over 10 years of ground level data to complete a detailed study of the opportunity costs of avoided deforestation. This study, perhaps unique in the world, has estimated detailed CO2-e opportunity cost curves for 6 large landscapes in Asia, Africa and Latin America. The interim report on that study, Opportunities for Avoided Deforestation with Sustainable Benefits, was launched at the UNFCCC COP in Bali in December 2007
ASB research has found that most deforestation generates relatively small economic benefits for the damage caused. Avoiding deforestation in the humid tropics can be a cost-effective approach for large reductions in CO2 emissions. With the right policy incentives, mechanisms for encouraging REDD could bring significant benefits to smallholder farmers, to ecosystems, and to the global climate.
To strengthen the ability of developing countries to develop and implement effective strategies for Reduced Emissions from Deforestation and forest Degradation (REDD) within a broad landscape management perspective.
- To develop robust methods and tools for advancing opportunity cost analysis of foregone land use change in forest landscapes, acknowledging and including the wide range of forests and other land use types found in these landscapes
- To support professionals working in relevant national organizations (governmental, university, non-governmental) to understand, adapt and use the analytical methods and interpret the results
- To provide responsible technical and analytical support to national REDD implementation teams.
ASB will refine and adapt the ASB tradeoff and opportunity cost analyses to enable developing countries, especially those involved in the World Bank Forest Carbon Partnership Facility (WB-FCPF), to conduct comprehensive opportunity cost analyses. ASB will
These activities are implemented with financial support from the World Bank Forest Carbon Partnership Facility (FCPF). Early phases of this research were supported by the European Union.