Carbon Balance and Management(4)

Figure 6

Expenditure under different Carbon Prices. Incentives... Periodic payments for standing biomass, All... Payments are done, without considering the effectiveness of the payment, in all regions, Region... Payments are done in regions where the payments protect forest against deforestation, Affected... Payments are done for forests where the payments protect

them against deforestation.

interlinked and place-specific factors. There is large spa-tially differentiated heterogeneity of deforestation pres-sures. Within a forest-agriculture mosaic, forests are underhigh deforestation pressure unless they are on sites whichare less suitable for agriculture (swamp, slope, altitude).Closed forests at the frontier to agriculture land are alsounder a high deforestation pressure while forest beyond

Figure 7

Cash flow until 2100 for different Carbon Prices. Incentives... Periodic payments for standing biomass, Tax... Payments for harvesting wood, Affected... Payments are done for forests where the payments protect them against defor-estation, Burn... felled wood is burned immediately, Sell... har-vested wood is soled, Burn/Sell... share of the wood will be burned the other part soled.

this frontier are under low pressure as long as they arebadly attainable. The model was build to capture suchheterogeneity in deforestation pressures.

Figure 9 shows that the model predicts deforestation tocontinue at the frontier to agricultural land and in areaswhich are easly accessible. Trans-frontier forests are alsopredicted to be deforested due to their relative accessibil-ity and agricultural suitablility. Forests in mosaic landscontinue to be under strong pressure. Figure 10 illustratesthe geography of carbon saved at a carbon tax of 12 US$/tC compared to biomass lost through deforestation.Under this scenario deforestation is maily occurring inclusters, which are sometimes surrounded by forests (e.g.Central Africa) or are concentrated along a line (Amazon).The geography of the remaining deforestation patternindicates that large areas are prevented from deforestationat the frontier by the 12 US$/tC tax. The remaining emis-sions from deforestation are explained mainly by theiraccessibility and favourable agricultural suitability.

Conclusion

Avoiding deforestation requires financial mechanismsthat make retention of forests economically competitivewith the currently often preferred option to seek profitsfrom other land uses. According to the model calcula-tions, even relatively low carbon incentives of around 6 $/tC/5 year, paid for forest carbon stock retention or carbontaxes of 12 $/tC would suffice to effectively cut emissionsfrom deforestation by half. Taxes revenues would bringabout annual income of US$6 bn in 2005 to US$0.7 bn in2100. The financial means required for incentives are esti-mated to range from US$3 bn to US$ 200 bn per year,depending on the design of the avoided deforestation pol-icy. Our scenario, where incentives are payed in regionswhere deforestation will appear and the payment has aneffect, estimates the necessary funds to cut emissions fromdeforestation in half in the magnitude of some US$ 33 bnper year, without including costs for transaction, observa-tion and illegal logging protection. Increasing the value offorest land and thereby make it less easily prone to defor-estation would act as a strong incentive to increase pro-ductivity of agricultural and fuelwood production.

Methods

The model is based mainly on the global afforestationmodel of [4] and calculates the net present value of for-estry with equation (1 – 16) and the net present value ofagriculture with equation (17 – 20). Main drivers for thenet present value of forestry are income from carbonsequestration, wood increment, rotation period length,discount rates, planting costs and wood prices. Main driv-ers for the net present value of agriculture on current forestland are population density, agricultural suitability andrisk adjusted discount rates.