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A Carbon Sequestration Supply Function and Development of Feasible Clean Development Mechanism Rules for Tropical Forest Carbon Sinks

Suzi Kerr; Alexander Strickland Pfaff Talikoff

Title:
A Carbon Sequestration Supply Function and Development of Feasible Clean Development Mechanism Rules for Tropical Forest Carbon Sinks
Author(s):
Kerr, Suzi
Talikoff, Alexander Strickland Pfaff
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
9899-08
Publisher:
Department of Economics, Columbia University
Publisher Location:
New York
Abstract:
With the rise in importance of global climate change, society is actively exploring the possibility of using forest ecosystems as a carbon sink. Tropical forests may offer over two-third of such opportunities. The protection of tropical forests could offset global fossil fuel C emissions and reduce the cost of emissions limitations set in Kyoto, and certified emissions credits (CERs) under the Clean Development Mechanism (CDM) established in Kyoto will likely incorporate tropical forest sinks within efforts to meet emissions targets. While this could in principle result in significant economic and sequestration benefits, actual evidence on tropical C sinks is sparse. However, society must soon make key decisions concerning tropical forest sinks in the CDM. (Physical and Economic Factors economics land Use choices ecology Carbon Implications). The first major goal of our project is to estimate how much C sequestration will be generated in Costa Rica in response to any given monetary reward for C sequestration. Our advances in the ecological and economic components will be coupled to produce our first integrated output, an estimated supply or, equivalently, cost function for C sequestration (i.e. a relationship between the C reqard and the C sequestration supplied by land users). Our estimated function will itself answer policy questions about the effects of C payments, and will provide a basis for estimating the value that accrues globally and to individual countries from using C trading within the efforts to implement emissions limitations. It can also be plugged into integrated assessment models. Our advances in the economic component start with excellent existing GIS database on land use and land cover, and on the factors expected to affect land use choices. We will extend both of these types of data sets, in particular extending land-cover information back in time, and adding improved data on land returns. Next, we will both apply and extend the frontier of economic, observationally-based modeling of land use to provide a map from key factors to land choices. On the ecological side, our advances start with systematic and comprehensive measurement of above ground and soil C present within the range of forest ecosystems of Costa Rica as well as the C dynamics within land-use gradients of each of those systems (e.g., pastures, croplands, and secondary forests of varying ages). With this and existing data, we will calibrate and verify both process-based and empirically-based ecological models that generate C predictions of varying complexity. This provides a map to C stocks from land use choices within different ecosystem. Our second goal is to contribute to the effective design of the rules that allow C sequestration in tropical locations to replace emissions reductions in developed countries. Our analyses will provide the necessary information for the baselines that permit CERs to be defined, and a C market to function. We will also perform integrated sensitivity analyses to determine whether simplified versions of our disciplinary and integrated models maintain sufficient accuracy. Sufficient accuracy will ensure the sequestration outcomes envisioned, while greater simplicity which translates to lower costs of participation in trading, will stimulate further participation, lowering costs and raising the efficiency of implementation of the Kyoto emissions limitations.
Subject(s):
Economics
Environmental studies
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