Economics of climate change mitigation forest policy scenarios for Ukraine

Abstract

This article reveals the contribution of woodland expansion in Ukraine to climate change mitigation policies. The opportunities for climate change mitigation of three policy scenarios: (1) carbon storage in forests, (2) carbon storage and additional wood-for-fuel substitution, and (3) carbon storage with additional sink policy for wood products, are investigated by using a simulation technique, in combination with cost—benefit analysis. The article concludes that the Ukraine's forests and their expansion offer a low-cost opportunity for carbon sequestration. Important factors that influence the results are the discount rate and the time horizon considered in the models. The findings provide evidence that the storage climate change mitigation forest policy scenario is most viable for the country, under the assumptions considered in this research.     

Environmental impacts of sequestering carbon through forestation

An issue that arises when considering the potential damages of climate change is whether it is possible to slow or stop human caused climate change. One suggestion to reduce the threat of global warming is to change our management of forests to offset carbon emissions. This study examines the impacts of such a policy on environmental amenities in existing Douglas-fir forests. In this analysis Douglas-fir forest management is modelled in a Faustmann framework, where the forest produces three goods: timber, carbon sequestration and amenities. Using this framework, the level of amenities under profit-maximizing and carbon-sequestration management regimes are compared. The change in the level of seven specific amenities is modelled. These amenities include trout, wildlife diversity, visual aesthetics, soil stability, deer populations, elk populations, and water yield. The study finds that the effect of a carbon sequestration policy will depend on the discount rate chosen. In most situations externalities vary less than plus or minus ten percent. However, those externalities that exhibit discontinuities in their relationship to forest age may vary a hundred percent or more depending on the discount rate used.     

黔东南低效林改造碳汇潜力情景分析

对黔东南以杉木和马尾松为主的低效林改造规划的案例分析表明,相对于维持现状的基线情景,低效林改造的碳汇效益的有无或大小取决于现有基线林分状况、低改措施以及林分的经营目的。如果以培育长周期大径材为目标,即项目期内无主伐,则将有明显的碳汇效益;但是,如果以短周期工业原料林或速生丰产林为经营目标,即项目期内发生一次或多次主伐,则碳汇效益十分有限,甚至相对基线情景,生物量中的长期碳储量将减少;择伐可大大提高低效林改造的碳汇效益。因此,要使低效林改造产生较大的净碳汇效益,甚至纳入碳交易,应尽可能避免短轮伐期;如果必须要主伐,也应尽可能采用择伐方式,以提高碳储量的长期平均水平。     

Replacing carbon lost from forests: an assessment of insurance, reserves, and expiring credits

Concern over the “non-permanence” or reversibility of carbon sequestration projects has been prominent in discussions over how to develop guidelines for forest project investments under the Clean Development Mechanism (CDM) of the UNFCCC Kyoto Protocol. Accordingly, a number of approaches have been proposed that aim to help ensure that parties do not receive credit for carbon that is lost before project obligations are fulfilled. These approaches include forest carbon insurance, land reserves, and issuance of expiring credits. The potential costs of each of these different approaches are evaluated using a range of assumptions about project length, risk and discount rate, and a comparison of costs is ventured based on the estimated reduction in value of these credits compared with uninsured, and permanent credits. Obstacles to participation in the different approaches are discussed related to problems of long-term commitments, project scale, rising replacement costs, and low credit value. It is concluded that a system of expiring credits, which could be coupled with insurance or reserves, could guarantee obligations that span time-scales longer than that of conventional insurance policies while maintaining incentives for long-term sequestration.     

Dynamics of Russian Forests and the Carbon Budget in 1961–1998: An Assessment Based on Long-Term Forest Inventory Data

Development trends of Russian forests and their impact on the global carbon budget were assessed at the national level on the basis of long-term forest inventory data (1961–1998). Over this period, vegetation of Russian forest lands are estimated as a carbon sink, with an annual average level of carbon sequestration in vegetational organic matter of 210 ± 30 Tg C · yr^–1 (soil carbon is not considered in this study), of which 153 Tg C · yr^–1 were accumulated in live biomass and 57 Tg C · yr^–1 in dead wood. The temporal variability of the sink is very large; for the five-year averages used in the analysis, the C sequestration varies from about 60 to above 300 Tg C· yr^–1. It is shown that long-term forest inventory data could serve as an important information base for assessing crucial indicators of full carbon accounting of forests.     

Replacing carbon lost from forests: an assessment of insurance,reserves, and expiring credits

Abstract

Concern over the “non-permanence” or reversibility of carbon sequestration projects has been prominent in discussions over how to develop guidelines for forest project investments under the Clean Development Mechanism (CDM) of the UNFCCC Kyoto Protocol. Accordingly, a number of approaches have been proposed that aim to help ensure that parties do not receive credit for carbon that is lost before project obligations are fulfilled. These approaches include forest carbon insurance, land reserves, and issuance of expiring credits. The potential costs of each of these different approaches are evaluated using a range of assumptions about project length, risk and discount rate, and a comparison of costs is ventured based on the estimated reduction in value of these credits compared with uninsured, and permanent credits. Obstacles to participation in the different approaches are discussed related to problems of long-term commitments, project scale, rising replacement costs, and low credit value. It is concluded that a system of expiring credits, which could be coupled with insurance or reserves, could guarantee obligations that span time-scales longer than that of conventional insurance policies while maintaining incentives for long-term sequestration.     

A Review of Forest Carbon Sequestration Cost Studies: A Dozen Years of Research

Researchers have been analyzing the costs of carbon sequestration for approximately twelve years. The purpose of this paper is to critically review the carbon sequestration cost studies of the past dozen years that have evaluated the cost-effectiveness of the forestry option. Several conclusions emerge. While carbon sequestration cost studies all contain essentially the same components they are not comparable on their face due to the inconsistent use of terms, geographic scope, assumptions, program definitions, and methods. For example, there are at least three distinct definitions for a `ton of carbon' that in turn lead to significantly different meanings for the metric `dollars per ton of carbon'. This difference in carbon accounting further complicates comparison of studies. After adjusting for the variation among the studies, it appears that carbon sequestration may play a substantial role in a global greenhouse gas emissions abatement program. In the cost range of 10 to 150 dollars per ton of carbon it may be possible to sequester 250 to 500 million tons per year in the United States, and globally upwards of 2,000 million tons per year, for several decades. However, there are two unresolved issues that may seriously affect the contribution of carbon sequestration to a greenhouse gas mitigation program, and they will likely have counteracting effects. First, the secondary benefits of agricultural land conversion to forests may be as great as the costs. If that is the case, then the unit costs essentially disappear, making carbon sequestration a no-regrets strategy. In the other direction, if leakage is a serious issue at both the national and international levels, as suggested by some studies, then it may occur that governments will expend billions of dollars in subsidies or other forms of incentives, with little or no net gain in carbon, forests or secondary benefits. Preliminary results suggest that market interactions in carbon sequestration program analyses require considerably more attention. This is especially true for interactions between the forest and agricultural land markets and between the wood product sink and the timber markets.     

Carbon sequestration via wood harvest and storage: An assessment of its harvest potential

A carbon sequestration strategy has recently been proposed in which a forest is actively managed, and a fraction of the wood is selectively harvested and stored to prevent decomposition. The forest serves as a ‘carbon scrubber’ or ‘carbon remover’ that provides continuous sequestration (negative emissions). Earlier estimates of the theoretical potential of wood harvest and storage (WHS) based on coarse wood production rates were 10?±?5 GtC y^?1. Starting from this physical limit, here we apply a number of practical constraints: (1) land not available due to agriculture; (2) forest set aside as protected areas, assuming 50 % in the tropics and 20 % in temperate and boreal forests; (3) forests difficult to access due to steep terrain; (4) wood use for other purposes such as timber and paper. This ‘top-down’ approach yields a WHS potential 2.8 GtC y^?1. Alternatively, a ‘bottom-up’ approach, assuming more efficient wood use without increasing harvest, finds 0.1–0.5 GtC y^?1 available for carbon sequestration. We suggest a range of 1–3 GtC y^?1 carbon sequestration potential if major effort is made to expand managed forests and/or to increase harvest intensity. The implementation of such a scheme at our estimated lower value of 1 GtC y^?1 would imply a doubling of the current world wood harvest rate. This can be achieved by harvesting wood at a moderate harvesting intensity of 1.2 tC ha^?1 y^?1, over a forest area of 8 Mkm² (800 Mha). To achieve the higher value of 3 GtC y^?1, forests need to be managed this way on half of the world’s forested land, or on a smaller area but with higher harvest intensity. We recommend WHS be considered part of the portfolio of climate mitigation and adaptation options that needs further research.     

Carbon budget of managed forests in the Russian Federation in 1990–2050: Post-evaluation and forecasting

Considered are the contribution of managed forests in the Russian Federation to the climate change softening and the forecast of their carbon-depositing potential in the period till 2050 under different scenarios of the forest management. The sink of CO₂ to managed forests is estimated using the flow balance method. The CBM-CFS3 model worked out in the Canadian Forestry Service is used for predicting the carbon budget. It is found out that managed forests absorb 473.8 Mt of CO₂ per year. The carbon sink is caused by the reduction of the volume of the forest use and by the regeneration of cutover stands of previous years. Depending on the conditions of the forest use, by 2020 the CO₂ sink to managed forests will amount to 466–632 Mt/year and will be able to compensate from 21 to 29% of industrial emissions of greenhouse gases. The carbon absorption by managed forests will decrease to 105–235 Mt/year by 2050. To maintain and increase the carbon-depositing potential of managed forests, the Russian Federation needs the development of the system of purposeful activities on strengthening the protection against forest fires and on the intensification of forest reproduction.     

Potential impact of albedo incorporation in boreal forest sector climate change policy effectiveness

Forests have an important role to play in climate change mitigation through carbon sequestration and wood supply. However, the lower albedo of mature forests compared to bare land implies that focusing only on GHG accounting may lead to biased estimates of forestry's total climatic impacts. An economic model with a high degree of detail of the Norwegian forestry and forest industries is used to simulate GHG fluxes and albedo impacts for the next decades. Albedo is incorporated in a carbon tax/subsidy scheme in the Norwegian forest sector using a partial, spatial equilibrium model. While a price of EU€100/tCO₂e that targets GHG fluxes only results in reduced harvests, the same price including albedo leads to harvest levels that are five times higher in the first five years, with 39% of the national productive forest land base being cleared. The results suggest that policies that only consider GHG fluxes and ignore changes in albedo will not lead to an optimal use of the forest sector for climate change mitigation.

Policy relevance

Bare land reflects a larger share of incoming solar energy than dense forest and thus has higher albedo. Earlier research has suggested that changes in albedo caused by management of boreal forest may be as important as carbon fluxes for the forest's overall global warming impacts. The presented analysis is the first attempt to link albedo to national-scale forest climate policies. A policy with subsidies to forest owners that generate carbon sequestration and taxes levied on carbon emissions leads to a reduced forest harvest. However, including albedo in the policy alongside carbon fluxes yields very different results, causing initial harvest levels to increase substantially. The inclusion of albedo impacts will make harvests more beneficial for climate change mitigation as compared to a carbon-only policy. Hence, it is likely that carbon policies that ignore albedo will not lead to optimal forest management for climate change mitigation.     

The leaky sink: persistent obstacles to a forest carbon sequestration program based on individual projects

One strategy for mitigating the increase in atmospheric carbon dioxide is to expand the size of the terrestrial carbon sink, particularly forests, essentially using trees as biological scrubbers. Within relevant ranges of carbon abatement targets, augmenting carbon sequestration by protecting and expanding biomass sinks can potentially make large contributions at costs that are comparable or lower than for emission source controls. The Kyoto protocol to the framework convention on climate change includes many provisions for forest and land use carbon sequestration projects and activities in its signatories’ overall greenhouse gas mitigation plans. In particular, the protocol provides a joint implementation provision and a clean development mechanism that would allow nations to claim credit for carbon sequestration projects undertaken in cooperation with other countries. However, there are many obstacles for implementing an effective program of land use change and forestry carbon credits, especially measurement challenges. This paper explains the difficulty that even impartial analysts have in assessing the carbon offset benefits of projects. When these measurement challenges are combined with self-interest, asymmetries of information, and large numbers, it prevents to a project-based forest and land use carbon credit program may be insurmountable.     

CARBON EMISSIONS FROM MEXICAN FORESTS: CURRENT SITUATION AND LONG-TERM SCENARIOS

Estimates of carbon emissions from the forest sector in Mexico are derived for the year 1985 and for two contrasting scenarios in 2025. The analysis covers both tropical and temperate closed forests. In the mid-1980s, approximately 804,000 ha/year of closed forests suffered major perturbations, of which 668,000 ha was deforestation. Seventy-five percent of total deforestation is concentrated in tropical forests. The resulting annual carbon balance from land-use change is estimated at 67.0 × 10⁶ tons/year, which lead to net emissions of 52.3 × 10⁶ tons/year accounting for the carbon uptake in restoration plantations and degraded forest lands. This last figure represents approximately 40% of the country's estimated annual total carbon emissions for 1985–1987. The annual carbon balance from the forest sector in 2025 is expected to decline to 28.0 × 10⁶ t in the reference scenario and to become negative (i.e., a carbon sink), 62.0 × 10⁶ t in the policy scenario. A number of policy changes are identified that would help achieve the carbon sequestration potential identified in this last scenario.     

Simulation of regional temperature change effect of land cover change in agroforestry ecotone of Nenjiang River Basin in China

Currently, US forests constitute a large carbon sink, comprising about 9 % of the global terrestrial carbon sink. Wildfire is the most significant disturbance influencing carbon dynamics in US forests. Our objective is to estimate impacts of climate change, CO₂ concentration, and nitrogen deposition on the future net biome productivity (NBP) of US forests until the end of twenty-first century under a range of disturbance conditions. We designate three forest disturbance scenarios under one future climate scenario to evaluate factor impacts for the future period (2011–2100): (1) no wildfires occur but forests continue to age (S_aging), (2) no wildfires occur and forest ages are fixed in 2010 (S_{fixed_nodis}), and (3) wildfires occur according to a historical pattern, consequently changing forest age (S_{dis_age_change}). Results indicate that US forests remain a large carbon sink in the late twenty-first century under the S_{fixed_nodis} scenario; however, they become a carbon source under the S_aging and S_{dis_age_change} scenarios. During the period of 2011 to 2100, climate is projected to have a small direct effect on NBP, while atmospheric CO₂ concentration and nitrogen deposition have large positive effects on NBP regardless of the future climate and disturbance scenarios. Meanwhile, responses to past disturbances under the S_{fixed_nodis} scenario increase NBP regardless of the future climate scenarios. Although disturbance effects on NBP under the S_aging and S_{dis_age_change} scenarios decrease with time, both scenarios experience an increase in NBP prior to the 2050s and then a decrease in NBP until the end of the twenty-first century. This study indicates that there is potential to increase or at least maintain the carbon sink of conterminous US forests at the current level if future wildfires are reduced and age structures are maintained at a productive mix. The effects of CO₂ on the future carbon sink may overwhelm effects of other factors at the end of the twenty-first century. Although our model in conjunction with multiple disturbance scenarios may not reflect the true conditions of future forests, it provides a range of potential conditions as well as a useful guide to both current and future forest carbon management.     

Agricultural soil carbon accumulation in North America: considerations for climate policy

The Kyoto Protocol introduces the possibility that changes in carbon stock on agricultural and forest land and soils may be counted against countries’ commitments to reduce their greenhouse gas emissions. Including activities related to land use change and forestry in the international climate change agreement may stimulate new incentives for soil-conservation practices domestically. However, a primary criteria for their inclusion relates to the level of accuracy and transparency with which carbon stock changes can be assessed. Parties will also be concerned with the wider environmental impact of different sequestration practices, and the impact of offsets on overall emissions targets. This paper examines these issues for agricultural soils, considering recent research in North America. It is argued that incentives for carbon sequestration practices may need to be implemented independently of actual stock changes because farm-level soil monitoring would be very costly. In the USA, priority should be given to establishing incentives for cover crops and to expanding conservation tillage programs. These activities provide a range of ancillary environmental benefits. In contrast, improvements in biomass yield tend to rely on higher fertilizer inputs with their related environmental costs. Carbon accumulated through any of these activities is easily lost if the practices are discontinued, and so assessment procedures are needed that would avoid overestimating sequestration. Annual accumulation in agricultural soils could be equivalent to about 10% of Annex I carbon dioxide emissions, and therefore options for limiting sink credits from soils should be considered.     

Potential for forest carbon plantings to offset greenhouse emissions in Australia: economics and constraints to implementation

The theoretical potential for carbon forests to off-set greenhouse gas emissions may be high but the achievable rate is influenced by a range of economic and social factors. Economic returns (net present value, NPV) were calculated spatially across the cleared land area in Australia for ‘environmental carbon plantings’. A total of 105 scenarios were run by varying discount rate, carbon price, rate of carbon sequestration and costs for plantation establishment licenses for water interception. The area for which NPV was positive ranged from zero ha for tightly constrained scenarios to almost the whole of the cleared land (104 M ha) for lower discount rate and highest carbon price. For the most plausible assumptions for cost of establishment and commercial discount rate, no areas were identified as profitable until a carbon price of AUD$40 t CO₂ ^?1 was reached. The many practical constraints to plantation establishment mean that it will likely take decades to have significant impact on emission reductions. Every 1 M ha of carbon forests established would offset about 1.4 % of Australia’s year 2000 emissions (or 7.4 Mt CO₂ year^?1) when an average rate of sequestration per ha was reached. All studies that predict large areas of potentially profitable land for carbon forestry need to be tempered by the realities that constrain land use change. In Australia and globally, carbon plantings can be a useful activity to help mitigate emissions and restore landscapes but it should be viewed as a long-term project in which co-benefits such as biodiversity enhancement can be realised.     

Set-asides for carbon sequestration: implications for permanence and leakage

This paper examines the potential role of forest set-asides in global carbon sequestration policy. While set asides that protect forests from timber harvests and land-use conversion may alleviate concerns with permanence, and they may provide large ancillary environmental benefits, they may also lead to large leakage. This paper uses a global land use and forestry model to examine the efficiency of three crediting schemes for set-asides. The results show that if set-asides are integrated into a global forestry carbon sequestration program that includes a wide range of other management options, then 300 million hectares of land would be set-aside, and up to 128 Pg C could be sequestered in global forests by 2105. Under alternative policies that focus exclusively on set-asides, more forestland can be set-asides, up to 3.2 billion hectare, but these policies invite large leakage in the near-term, and in the long-run, they less net carbon is removed from the atmosphere. Specifically, leakage is estimated to be 47–52%, depending on the policy, and by the end of the century, up to 17% less carbon will be sequestered in all forests.     

The leaky sink: persistent obstacles to a forest carbon sequestration program based on individual projects

Abstract

One strategy for mitigating the increase in atmospheric carbon dioxide is to expand the size of the terrestrial carbon sink, particularly forests, essentially using trees as biological scrubbers. Within relevant ranges of carbon abatement targets, augmenting carbon sequestration by protecting and expanding biomass sinks can potentially make large contributions at costs that are comparable or lower than for emission source controls. The Kyoto protocol to the framework convention on climate change includes many provisions for forest and land use carbon sequestration projects and activities in its signatories' overall greenhouse gas mitigation plans. In particular, the protocol provides a joint implementation provision and a clean development mechanism that would allow nations to claim credit for carbon sequestration projects undertaken in cooperation with other countries. However, there are many obstacles for implementing an effective program of land use change and forestry carbon credits, especially measurement challenges. This paper explains the difficulty that even impartial analysts have in assessing the carbon offset benefits of projects. When these measurement challenges are combined with self-interest, asymmetries of information, and large numbers, it prevents to a project-based forest and land use carbon credit program may be insurmountable.     

How the future of the global forest sink depends on timber demand,forest management,and carbon policies

Deforestation has contributed significantly to net greenhouse gas emissions, but slowing deforestation, regrowing forests and other ecosystem processes have made forests a net sink. Deforestation will still influence future carbon fluxes, but the role of forest growth through aging, management, and other silvicultural inputs on future carbon fluxes are critically important but not always recognized by bookkeeping and integrated assessment models. When projecting the future, it is vital to capture how management processes affect carbon storage in ecosystems and wood products. This study uses multiple global forest sector models to project forest carbon impacts across 81 shared socioeconomic (SSP) and climate mitigation pathway scenarios. We illustrate the importance of modeling management decisions in existing forests in response to changing demands for land resources, wood products and carbon. Although the models vary in key attributes, there is general agreement across a majority of scenarios that the global forest sector could remain a carbon sink in the future, sequestering 1.2–5.8 GtCO2e/yr over the next century. Carbon fluxes in the baseline scenarios that exclude climate mitigation policy ranged from −0.8 to 4.9 GtCO2e/yr, highlighting the strong influence of SSPs on forest sector model estimates. Improved forest management can jointly increase carbon stocks and harvests without expanding forest area, suggesting that carbon fluxes from managed forests systems deserve more careful consideration by the climate policy community.     

Extending timber rotations: carbon and cost implications

A number of studies have suggested that incentives for carbon sequestration could lead to longer rotation periods for even-aged managed forests. In this article we examine the potential costs and quantity of sequestered carbon from extending rotation ages in softwood forests of the southern and western USA. A model of optimal rotations when carbon is a valued asset was developed to show how optimal rotations adjust when carbon is priced. Data on 324 types and site classes of softwood forests in southern and western states of the USA were used to examine the costs of extending rotations. The results were then aggregated by applying the marginal cost curves to inventory data within each county in these states. The results indicate that in these 12 states, about 15 million tCO₂ could be sequestered for less than $7/tCO₂ (1 tCO₂ = 1,000 kg CO₂), although for substantially higher carbon prices of $55/tCO₂, up to 209 million tCO₂ could be sequestered. Timber prices were found to have an important influence on the marginal costs of carbon sequestration, with site quality being of secondary importance. The results also showed that at $55/tCO₂ potentially 1 million ha of softwood forests could be set aside, mostly in the western states.