Browsing by Subject "REDD"

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    ItemOpen Access
    A Financial and Economic Assessment of the Conservation of Northwestern Madagascar Mangroves
    (2016-04-29) Witt, Emily
    Programs such as REDD (reducing emissions from deforestation and forest degradation) that provide financial incentives to maintain natural carbon stocks are being implemented worldwide to address climate change and the conservation of threatened ecosystems. In developing countries, where the relative cost of conservation is high, these programs are especially attractive to promote sustainable resource use and prevent conversion of valuable ecosystems to other land uses. To incorporate REDD effectively in these areas, the financial costs and benefits resulting from the project implementation needs to be accessed. Quantification of income received from ecosystem services under baseline and project scenarios needs to be estimated, along with other costs of conservation management in order for a comprehensive comparison to be done. Ensuring that the project not only generates additional value, but also promotes the livelihoods of communities that rely on these ecosystems is key to the long-term sustainability of conservation efforts. This report serves as a cost-benefit analysis case study in Ambro-Ambanja Bay, Madagascar. This financial analysis looks at Blue Ventures’ proposed conservation of mangrove forests in Northwestern Madagascar using a REDD project. Project cash flows center around net income derived from certain ecosystem services, carbon income generated from REDD and project implementation and transaction costs. One limitation of this analysis is the exclusion of several partial, indirect and non-use ecosystem services provided by the Ambro-Ambanja Bay mangrove forest. To address this, a total economic valuation framework of all ecosystem services provided by Ambro-Ambanja Bay mangroves was created to provide additional insight into the entire estimated value of healthy mangrove forests. The first chapter of this report provides a background on mangrove ecosystems, the state of Ambaro-Ambanja Bay mangroves, and the general objectives of the proposed project. The second chapter provides an overview of methods used to estimate deforestation, methods used to derive the net income generated from various ecosystem services, and estimates of the costs associated with the project. The chapter details how these costs and benefits were derived under the baseline and project scenarios to provide insight on the impacts the two scenarios have on the estimated financial cash flows. The third chapter consists of a financial analysis of the project from the perspective of each of the major stakeholders. The financial assumptions are stated along with an overview of the government, project developer and community perspectives. Costs and benefits for each perspective were summarized in the form of net present values (NPV), which were calculated under various scenarios. It was found that the project was profitable for the government and community perspectives, and breakeven for the project developer, when carbon income was included. Major differences in NPVs between the assorted scenarios were analyzed and the sensitivities of those NPVs to changes in the stated assumptions were also tested. The fourth chapter details a proposed framework for valuing the additional ecosystem services that were not valued in the initial cost benefit analysis. An overview of those ecosystem services along with the various methods chosen to value each service is discussed. Benefit transfer was the main method employed to value the partial, indirect and non-use services. The section then details what literature estimates, data and calculations were used or are needed to derive the annual per hectare value provided by each service from healthy Ambaro-Ambanja Bay mangroves. The fifth chapter identifies the aspects of the project that might introduce risk to the long-term sustainability of the project. These risks include delayed benefits from the community perspective due to a 14 year project payback period, heavy reliance on carbon credit income for project profitability from the community perspective, and reliance on donor funding to break even from the project developer perspective. Proposed management considerations to mitigate these risks include project refinancing, potential development of an additional project income generating activity, and diversification of donor funding sources. This report makes several key points and recommendations: • Analyzing project profitability from the perspective of all major stakeholders is important in identifying where potential risks lie and who will be bearing those risks. • Although measures of net present value provide a simplified summary of the total discounted value received, it is critical to look deeper into the characteristics of the distribution of costs and benefits over time and the impacts it might have on stakeholders, especially those that are risk-averse. • Assumptions based on extremely volatile and new markets, such as the Voluntary Carbon Market, need to be made with caution and tested for project sensitivity. • Estimation and assessment of the total economic value (TEV) of all of the ecosystem services is needed to determine the true value of healthy mangroves in Ambaro-Ambanja Bay. The indirect value of these services and the impact of deforestation on that value need to be considered by the stakeholders.
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    An Economic Analysis of REDD Carbon Payments on Agricultural Expansion in Bolivia
    (2009-04-22T18:48:05Z) Stich, Monica
    As deforestation accounts for a significant percentage of worldwide carbon emissions, reducing emissions from deforestation and degradation (REDD) has been the focus of intense international debate. REDD programs offer a financial mechanism to compensate areas that would have been deforested for avoided carbon emissions above an established baseline. This study examined the feasibility of such a program in El Chore Forest Reserve in Bolivia, which faces destruction from the illegal seizure of land by poor immigrant farmers. Three main components were used to obtain a spatial distribution of the minimum price of carbon required for conservation (i.e. compensate for the opportunity cost of agriculture): estimation of biomass, prediction of deforestation, and calculation of the opportunity cost. A map of biomass was estimated by regressing spectral enhancements of 2007 satellite imagery on a spatially coarse reference map of the Amazon region. It was concluded that the reserve has an average biomass of 121.1 Mg biomass/ha with a standard deviation of 15.58. The spatial probability of future deforestation was calculated using a logistic analysis on deforestation between 2001 and 2004 based on biophysical variables. By applying a projection of area deforested per year based on historical trends, the results indicated the area that would be deforested. In the absence of intervention, it was predicted that 44% of the forest reserve would be converted to agriculture by 2036 (Kappa: 0.57). The opportunity cost was modeled using profit predictions of the four main crops (rice, soybean, maize, wheat). Depending on the crop, projections indicated that prices would increase 35-100% and yields were expected to increase 55-88% by 2040. Expected profits were scaled based on the suitability of the land by crop. The average opportunity cost for a three-year time period ranged from $904/ha in 2006 to $2143/ha in 2036. Using an economic model with an 8% discount rate the average price would need to be $21.17/tC. Since the biomass estimate is conservative, this is likely an upper bound on the price of carbon. These results could be used to inform the development of a carbon program and determine target areas for conservation initiatives.
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    Avoided Deforestation in the Democratic Republic of Congo
    (2008-12-05T15:06:25Z) McClanahan, Paige
    Deforestation and forest degradation account for one fifth of greenhouse gas emissions around the world, second only to fossil fuel combustion. While the Kyoto Protocol has no mechanism that aims to stop forest loss, climate negotiators have begun to devise a program – to be built into Kyoto’s successor – that would reward developing countries for “avoiding deforestation” that otherwise would have occurred. Reduced Emissions from Deforestation and Forest Degradation, or REDD, certainly offers a lot of promise: by allowing poor forested countries to earn, and then sell, tradable carbon credits on a global carbon market, the program could generate a substantial amount of revenue. And many observers have argued that these funds could be used to help fight poverty in forest-dwelling communities. But REDD implementation would not be easy: it would require the technical capacity to measure and monitor forest cover and the governance capacity to both stop forest loss and distribute REDD-derived income. These challenges would be particularly daunting in countries that already struggle to govern effectively. To consider this issue in greater depth, this paper uses the Democratic Republic of Congo as a lens through which to examine the challenges of REDD implementation, especially with regard to how the program might impact the country’s poor forest dwellers. The paper concludes that, in the face of such governance challenges, the DRC should take concrete steps to create a facilitating environment for the program’s implementation. These steps include increasing investment in the forest sector, strengthening land tenure among forest-dwelling people, devolving more control over forests to local actors, and taking measures to increase transparency and combat corruption.
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    Protected Area Impacts on Land Cover in Mexico
    (2013-04-15) Santiago-Ávila, Francisco J.
    Although national and international efforts to mitigate deforestation during the last few decades have had some limited impact, they have failed to substantially slow the loss of tropical forests. This MP applies an approach for providing more evidence on what has worked or not worked in terms of conservation policies intended to reduce tropical natural land cover. Specifically, the work and approaches used in my analysis should help to illuminate the tradeoffs currently facing Mexico, a country which is seriously considering pursuing REDD policies, but also knows it would not be without economic costs. My main objective is to answer the question: "have conservation parks affected change in land cover in Mexico?” while a related objective is to assess if some types of parks have had reliably more impact. Due to the nonrandom establishment of protected areas (PAs), I employ a matching approach (propensity score) in order to construct a plausible counterfactual by controlling explicitly for land characteristics that proved to be significant drivers of both land cover change and protection status. My results indicate not only that my approach improved impact estimates, but also, in particular, that PAs lower land cover change pressure by 3.1%, and that strict protection seems to avoid more land cover change (5.3%) than loose (multi-use) protection (2.7%). While these results are suggestive, I would recommend also trying to get better and more data to test their robustness.
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    ItemOpen Access
    Protected Area Impacts on Land Cover in Mexico
    (2013-04-15) SantiagoÁvila, Francisco J
    Although national and international efforts to mitigate deforestation during the last few decades have had some limited impact, they have failed to substantially slow the loss of tropical forests. This MP applies an approach for providing more evidence on what has worked or not worked in terms of conservation policies intended to reduce tropical natural land cover. Specifically, the work and approaches used in my analysis should help to illuminate the tradeoffs currently facing Mexico, a country which is seriously considering pursuing REDD policies, but also knows it would not be without economic costs. My main objective is to answer the question: "have conservation parks affected change in land cover in Mexico?” while a related objective is to assess if some types of parks have had reliably more impact. Due to the nonrandom establishment of protected areas (PAs), I employ a matching approach (propensity score) in order to construct a plausible counterfactual by controlling explicitly for land characteristics that proved to be significant drivers of both land cover change and protection status. My results indicate not only that my approach improved impact estimates, but also, in particular, that PAs lower land cover change pressure by 3.1%, and that strict protection seems to avoid more land cover change (5.3%) than loose (multi-use) protection (2.7%). While these results are suggestive, I would recommend also trying to get better and more data to test their robustness.
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    ItemOpen Access
    The State of The International Forest Carbon Market 2009
    (2009-04-24T14:47:14Z) Kohlhoff, Lindsay
    Covering roughly 30% of global land area (4 billion ha2) and storing more than double the amount of carbon in the atmosphere, forest ecosystems act as an enormous carbon reservoir or “sink”. The potential of forests to play a significant role as emissions offsets in carbon markets and mitigate climate change is immense. A number of factors including the uncertainty of offset potential, project verification and additionality, and uncertain methodology for offset credit transferability have led to limited use of forest carbon offsets in current compliance markets. While current uncertainties prevent forest carbon from playing a large-scale role in established compliance markets, the introduction of credible forest offset standards which reduce project uncertainty, coupled with the ability of forest carbon offsets to act as the “low hanging fruit” of carbon offsets, make forest carbon projects a more favorable option for widespread inclusion in policy making. Seeking to fill information gaps within the highly fragmented forest carbon market, this report is the first of its kind to educate market participants, policy makers, and the general public about the current status of the international forest carbon market. This project serves to accelerate the transfer of information between stakeholders and offer insights into the state, health and future viability of the forest carbon market.