FEEM working papers "Note di lavoro" series
2015 .081

The Potential of REDD+ for Carbon Sequestration in Tropical Forests: Supply Curves for carbon storage for Kalimantan, Indonesia


Authors: Yonky Indrajaya, Edwin van der Werf, Hans-Peter Weikard, Frits Mohren, Ekko C. van Ierland
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Keywords: REDD+, Carbon Credits, Carbon Sequestration, Sustainable Forest Management, Reduced Impact Logging, Optimal Forest Management, Carbon Price
JEL n.: Q2, Q23

Abstract

We study the potential of tropical multi-age multi-species forests for sequestering carbon in response to financial incentives from REDD+. The use of reduced impact logging techniques (RIL) allows a forest owner to apply for carbon credits whereas the use of conventional logging techniques (CL) does not. This paper is the first to develop a Hartman model with selective cutting in this setting that takes additionality of carbon sequestration explicitly into account. We apply the model using data for Kalimantan, Indonesia. RIL leads to less damages on the residual stand than CL and has lower variable but higher fixed costs. We find that a system of carbon credits through REDD+ has a large potential for carbon storage. Interestingly, awarding carbon credits to carbon stored in end-use wood products does not increase the amount of carbon stored and reduces Land Expectation Value. We also observe that the level of the carbon price at which it becomes optimal not to harvest depends on the interpretation of the steady state model.

***

Suggested citation: Indrajaya, Y., E. van der Werf, H.-P. Weikard, F. Mohren, E. C. van Ierland, (2015), 'The Potential of REDD+ for Carbon Sequestration in Tropical Forests: Supply Curves for carbon storage for Kalimantan, Indonesia', Nota di Lavoro 81.2015, Milan, Italy: Fondazione Eni Enrico Mattei

Download file
Download PDF file

FEEM Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree