Transcript The role of carbon sequestration credits in influencing

Economic Potential of LandUse Change and Forestry for
Carbon Sequestration and
Poverty Reduction
Presentation Outline
Background
Objective
Output
Farm Level
Policy Level
Recommendation for
Future research
Background
Problem 1
Global Warming
Problem 2
(tropical countries)
deforestation,
land degradation,
poverty
smallholder
agroforestry
the market
demand
for CERs
supply of
CERs
Transformation Costs
Transaction Costs
energy
sector
industrial
plantations
Objectives
1. Determine the most appropriate farm
forestry systems for capturing carbon
credit payments and assisting in poverty
reduction
2. Estimate the transaction costs of actual
projects and identify principles of project
design to minimise these costs
Output
Objective 1 deals with farm-level analysis with tools
and outcomes:
 The MUTAN spreadsheets containing details (inputs, outputs,
prices, costs and carbon) of 24 farm forestry systems
 Relational plant-species information database, for both trees and
shrubs, (currently called TreeSmart) contains over 100 species.
 The SCUAF model (Soils Changes under Agroforestry) has been
rewritten. The new version (SCUAF 5) is designed to work in
conjunction with a spreadsheet. Examples include shifting
cultivation, rotations and agroforestry systems. The software and
examples are available for free download at:
http://www.une.edu.au/carbon/scuaf.php
•MUTAN stands for Model Usahatani Hutan (Farm Forestry Model)
Output
Figure 1. Mean annual increment (MAI) and current annual increment (CAI)
of two tree species in different sites. Arrows represent the cycle length based
On the traditional forester solution (maximisation of MAI)
Figure 2. Net present Value (NPV) of two species of trees grown in different sites
And under two accounting procedures: with no carbon credits (thin line) or with
Carbon credits under the ideal accounting system (solid line). Arrow represent the
optimal Cycle length
Table 1. Financial Analysis
Performance of the Systems: Small Scale CDM
Area (ha)
Size of Proje ct to Re ach 8000 t CO2 (Sm all Scale CDM )
0
1000
2000
3000
4000
5000
6000
No.HH
Number of House Hold to Reach 8000 t CO2
0
1000
2000
3000
SOURCE: CESERF-ACIAR, 2003
4000
5000
6000
Output
•
Objective 2 deals with transaction costs and project design
 Now that the Kyoto Protocol has been ratified, there has been some
activity under the Clean Development Mechanism (CDM). However, the
projects approved under the CDM so far do not include LUCF projects.
So our analysis has been based on existing smallholder development
projects from East Nusa Tenggara (IFSP and HKM), Muara Sungkai
(Lampung) ICRAF Project and Lombok (JIFPRO).
CDM Cycle
project developer
Project Design Document
host government (DNA)
National approval
Validation
Stakeholder
comments
Registration
Implementation + Monitoring
Verification and certification
CER issuance
operational entity
CDM executive board
project developer
operational entity
CDM executive board
Estimation of Transaction Costs for JIFPRO Pre-CDM Project
Project Design Document
Rp. 361.52 juta
projects >8000 ha
National approval
Validation
Rp. 0
Stakeholder
comments
Registration
Incl in certification
2% of CERs
* projects < 15,000 t C/y
Implementation + Monitoring
Verification and certification
Rp. 148.4 juta
Rp. 400 juta
Sumber: Prasetyo, 2005.
CER issuance
Generate & disseminate
information
Bundle projects
Teach landholders to
measure C
Encourage community selfregulation
Promote secure land tenure
enforcement
and insurance
monitoring
project
management
approval
search and
negotiation
Reducing transaction costs
Output Disemination
Publications:
• 16 working papers available in ACIAR manuscript
• 4 published journals and 3 under review
Computer Programs:
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•
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BRASS (Bioeconomic Rubber Agroforestry Support System)
SCUAF (Soil Change Under Agroforestry)
MUTAN (Model Usahatani Hutan / Farm Forestry Model)
TreeSmart (Relational Tree Database)
Eligible Location
(TA ADB Project 2005/6)




Deli Serdang, Nth. Sumatra
Singkarak, West Sumatra
West Lampung, Lampung
Sidrap, South Sulawesi

Bombana, SE Sulawesi

Hu. Su. Sel., S. Kalimantan
Indonesian closed forest cover - 1995
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Possibility for future research :
1. Potential of carbon trading for regional
economic and community development
2. Research on designing simplified carbon
trading
3. Research on how CDM community forestry
have effect on combating global change