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Tropical Forest Protection, Uncertainty, and the Environmental Integrity of Carbon Mitigation Policies

Author

Listed:
  • Suzi Kerr

    (Motu Economic and Public Policy Research)

  • Joanna Hendy

    (Motu Economic and Public Policy Research)

  • Shuguang Liu

    (EROS Data Center)

  • Alexander S. P. Pfaff

    (Economics Department, Columbia University)

Abstract
Tropical forests are estimated to release approximately 1.7 PgC per year as a result of deforestation. Avoiding tropical deforestation could potentially play a significant role in carbon mitigation over the next 50 years if not longer. Many policymakers and negotiators are skeptical of our ability to reduce deforestation effectively. They fear that if credits for avoided deforestation are allowed to replace fossil fuel emission reductions for compliance with Kyoto, the environment will suffer because the credits will not reflect truly additional carbon storage. This paper considers the nature of the uncertainties involved in estimating carbon stocks and predicting deforestation. We build an empirically based stochastic model that combines data from field ecology, geographical information system (GIS) data from satellite imagery, economic analysis and ecological process modeling to simulate the effects of these uncertainties on the environmental integrity of credits for avoided deforestation. We find that land use change, and hence additionality of carbon, is extremely hard to predict accurately and errors in the numbers of credits given for avoiding deforestation are likely to be very large. We also find that errors in estimation of carbon storage could be large and could have significant impacts. We find that in Costa Rica, nearly 42% of all the loss of environmental integrity that would arise from poor carbon estimates arises in one life zone, tropical wet. This suggests that research effort might be focused in this life zone.

Suggested Citation

  • Suzi Kerr & Joanna Hendy & Shuguang Liu & Alexander S. P. Pfaff, 2004. "Tropical Forest Protection, Uncertainty, and the Environmental Integrity of Carbon Mitigation Policies," Working Papers 04_03, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:04_03
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    File URL: https://motu-www.motu.org.nz/wpapers/04_03.pdf
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    References listed on IDEAS

    as
    1. International Monetary Fund, 2002. "Costa Rica: Selected Issues," IMF Staff Country Reports 2002/089, International Monetary Fund.
    2. Suzi Kerr & Shuguang Liu & Alexander Pfaff & Flint Hughes, 2003. "Carbon Dynamics and Land-use Choices: Building a Regional-scale Multidisciplinary Model," Others 0309005, University Library of Munich, Germany.
    3. Suzi Kerr, 2003. "Efficient Contracts for Carbon Credits from Reforestation Projects," Working Papers 03_12, Motu Economic and Public Policy Research.
    4. S. Brown & M. Burnham & M. Delaney & M. Powell & R. Vaca & A. Moreno, 2000. "Issues and challenges for forest-based carbon-offset projects: A case study of the Noel Kempff climate action project in Bolivia," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 5(1), pages 99-121, March.
    5. Chomitz, Kenneth M & Gray, David A, 1996. "Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize," The World Bank Economic Review, World Bank, vol. 10(3), pages 487-512, September.
    6. Pfaff, Alexander S. P., 1999. "What Drives Deforestation in the Brazilian Amazon?: Evidence from Satellite and Socioeconomic Data," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 26-43, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Hugh McDonald & Suzi Kerr, 2011. "Trading Efficiency in Water Quality Trading Markets: An Assessment of Trade-Offs," Working Papers 11_15, Motu Economic and Public Policy Research.
    2. Paula Cordero Salas & Brian E. Roe & Brent Sohngen, 2018. "Additionality When REDD Contracts Must be Self-Enforcing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(1), pages 195-215, January.
    3. Watson, Charlene & Mourato, Susana & Milner-Gulland, E. J., 2013. "Uncertain emission reductions from forest conservation: REDD in the Bale mountains, Ethiopia," LSE Research Online Documents on Economics 54192, London School of Economics and Political Science, LSE Library.
    4. Springborn, Michael & Yeo, Boon-Ling & Lee, Juhwan & Six, Johan, 2013. "Crediting uncertain ecosystem services in a market," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 554-572.

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    More about this item

    Keywords

    climate; economics; carbon sequestration; uncertainty; policy; tropics;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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