Negotiated Baselines & Carbon Credits for Actually Reducing Emissions

Figure 1: Schematic tradeoff between reduced greenhouse gas emissions through avoided deforestation and national economic development opportunities

Once the playing field is selected and the rules of the game are set (e.g. AFOLU accounting at the national level), the real 'game' can begin: determining the baseline of expected emissions that will be the basis for deciding what would constitute 'reduction'. In some ways this is akin to a market where national self-interests need to balance out across a range of current issues, including world trade in agricultural and forest-derived commodities.

National and sub-national governments would need to know how much 'avoided emissions' they could provide, and at what cost. Summary data of this type would require appraisal of scenarios for integrating economic development and land cover change. Currently, such estimates are not available, although there have been some promising advances in the countries of Meso-America.

In an earlier phase of the discussions on clean development mechanisms, an inventory was made of 'abatement costs', largely in the energy sector (http://www.adb.org/Documents/Reports/ALGAS/Summary/default.asp). These results indicated that there was a fraction of 'hot air' - emissions that could be avoided at negative total economic costs, as they generate net economic costs at the societal level. There is also a range of emissions associated with moderate economic gain that could be offset at feasible levels of financial transfer. There is also likely to be a range of emissions associated with substantial economic gains that could not be offset under current carbon prices. Figure 1 presents a schematic view of these different types of avoided emissions, plotted in terms of economic benefits from carbon emission against the value of carbon. Also displayed across the top of Figure 1 is some of the policy options that countries might promote in order to achieve different levels and types of emissions.

For the avoided deforestation debate in tropical countries, there are, to our knowledge, no estimates available for the cumulative abatement costs (see Figure 1 for the indicative shape). The ASB consortium for Indonesia is currently undertaking such an analysis for representative areas of Indonesia for the period since 1990.

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