Economic Assessment of Mitigation Options for Enhancing and Maintaining Carbon Sink Capacity in Indonesia
Author: Boer, R.
Source: Mitigation and Adaptation Strategies for Global Change, Volume 6, Numbers 3-4, 2001 , pp. 257-290(34)
Abstract:Land use, land-use change and forestry (LULUCF) projects may become eligible under Article 12 of the United Nations Framework Convention on Climate Change (UNFCCC) Kyoto Protocol's Clean Development Mechanism (CDM). Some of the issues, which need to be addressed, include identifying the types of greenhouse gas (GHG) mitigation activities in LULUCF, which could be undertaken as CDM projects. Other issues involve evaluating the mitigation potential and cost effectiveness of the activities, as well as their likely socio-economic impacts and their influence on the national carbon (C) stock. Three broad categories of mitigation activities in LULUCF analyzed in this study include managing C storage, C conservation and carbon substitution. The C intensity of the activities was estimated to range from 37 to 218 Mg C per ha. The highest is in reforested land with slow growing species and the lowest in short-rotation plantations. At a real discount rate of 10%, investment costs required to implement the mitigation activities ranged from US$0.07 to 0.88 per Mg C, with life cycle costs ranging from US$ 0.07 to 3.87 per Mg C, and benefits ranging from US$ –0.81 to 6.57 per Mg C. Mitigation options with negative benefits are forest protection, reforestation, reduced impact logging and enhanced natural regeneration, while those with positive benefits are short rotation timber plantation, and bio-energy. Reforestation gave negative benefit since no revenue from wood as trees are left in the forest for conservation, while Reduced Impact Logging (RIL) and Enhanced Natural Regeneration (ENR) gave negative benefits because additional cost required to implement the options could not be compensated by the increase in round-hardwood yield. Other factor is that the local price of round-hardwood is very low, i.e. US$ 160 per m^3, while FOB price is between 250–400 US$ per m^3. Total area available for implementing mitigation options (planting trees) in 1997 was 31 million hectares (× 10^6ha) (about 40% are critical lands, 35% grasslands and 25%unproductive lands). Total area being considered for implementing the options under baseline, government-plans and mitigation scenarios in the period 2000–2030 is 12.6, 16.3 and 23.6 × 10^6 ha respectively. Furthermore, total area of production forest being considered for implementing reduced impact logging and enrichment planting under the tree scenarios is 9, 26 and 16 × 10^6 ha respectively, and that for forest protection is 2.1, 3.7, 3.1 × 10^6 ha respectively. The cumulative investment for implementing all mitigation activities in the three scenarios was estimated at 595, 892 and 1026 million US$ respectively. National C stock under the baseline scenario will continuously decline through 2030, while under government-plans and mitigation scenarios the carbon stock increases. In 2030, national C stock of the government and mitigation scenarios is almost the same, 13% higher than that of baseline. However, the increase in national carbon stock in both scenarios could not offset carbon emissions due to deforestation.
Document Type: Regular Paper
Affiliations: Department of Geophysics and Meteorology, Bogor Agricultural University, Jl. Raya Pajajaran, Bogor, Indonesia
Publication date: January 1, 2001