Opportunities for REDD+ to minimise forest carbon emissions and mitigate climate change in Southeast Asia

Graham, Victoria F. (2017) Opportunities for REDD+ to minimise forest carbon emissions and mitigate climate change in Southeast Asia. Masters (Research) thesis, James Cook University.

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Tropical forests are large reservoirs of carbon, containing around half of the carbon stored in forests worldwide. Annual gross tropical deforestation is estimated at over 100 million hectares for the period 1990-2010, which contributed ~15% of total anthropogenic carbon emissions over that period. In recognition of the substantial emissions resulting from deforestation and forest degradation in the tropics, global agreements have emerged to incentivise the maintenance of carbon stocks in standing forests. Indonesia is one of the world's largest sources of net carbon emissions from land-use change. Most tropical forests are in developing countries, where trees themselves, along with non-timber forest products, represent a valuable natural resource for local communities.

A prominent international financial mechanism for supporting emissions reduction targets in developing countries is REDD+ (for Reducing Emissions from Deforestation and forest Degradation plus conserving, sustainably managing forests and enhancing forest carbon stocks). The mechanism channels monetary incentives to nations that preserve or enhance tropical forest carbon stores. REDD+ offers multiple benefits; by providing a degree of protection for threatened forests and attracting new streams of international investment. As with all policies, the financial and political support for REDD+ will depend on it being cost-effective, therefore, drawing attention to the financial competitiveness of different options for reducing emissions, could increase political support.

REDD+ has received widespread support and at the same time suffered much criticism since its inception in 2005. In particular, the economic viability of REDD+ depends on whether the financing it generates is sufficient to off-set lost revenues from extractive activities, which in Southeast Asia includes highly profitable logging and oil palm production. The general consensus from the literature is that REDD+ will be of limited utility for reducing emissions from oil palm because the revenues from converting forest into oil palm far outweigh the revenues from trading the carbon credits on voluntary markets. However, by focusing almost exclusively on reducing emissions from oil palm expansion into forested areas, these papers have overlooked potentially more cost-effective strategies for REDD+. To better allocate REDD+ resources, it is important to consider both activities that reduce emissions as well as activities that sequester carbon. It is equally as important to consider the spatial context in which projects are implemented, as costs and carbon incentives vary according to site specific factors. If restoring and sustainably managing forests offer cheaper avenues for reducing forest-based emissions, they could significantly alter the uptake of REDD+ within Southeast Asian nations and its role in global emissions reductions.

The primary goal of my thesis was to inform policy-makers regarding financially appropriate ways forward for REDD+ in Southeast Asia, by applying quantitative tools to compare the range of opportunities for reducing forest carbon emissions cost-effectively. The objectives underpinning this thesis were to (1) estimate the average per unit costs and carbon benefits of a wide range of REDD+ strategies in Southeast Asia; and, (2) estimate the mitigation costs and scope of these strategies in Indonesia using spatially-explicit costs and benefits. This approach allowed me to compare the cost-effectiveness of different strategies and highlight key opportunities (both strategies and locations) for REDD+.

Oil palm and timber are two of the most economically important land use activities in Southeast Asia. The expansion of oil palm and timber plantations contributed to 36% (5.3Mha) of forest loss in Indonesia between 2000 and 2010; hence plans to protect forests through REDD+ commonly target these two industries. REDD+ is perceived to be economically unviable due to the high costs of projects that target oil palm and timber production. However, REDD+ promotes other means of conserving forest carbon stocks, such as: (1) employing sustainable forest management to reduce degradation during logging; (2) conserving forest carbon stores by improving the management of protected areas; and (3) enhancing terrestrial carbon stores through reforestation. In Chapter 2, I reviewed REDD+ projects currently being deployed in Southeast Asia to determine if projects primarily reduce emissions from logging and oil palm, or pursue alternative strategies. I then conducted cost-benefit analyses to comparatively assess a subset of REDD+ strategies. I found a high level of variation in the cost of reducing emissions between strategies, ranging from $9 to $75 per tonne of avoided carbon emissions. The strategies that focused on reducing forest degradation and promoting forest regrowth were the most cost-effective ways of reducing emissions and were used in over 60% of projects.

The tendency in the literature to focus on average costs of reducing forest-based emissions across large land areas may be further overestimating the costs of REDD+. Mitigation costs and carbon benefits can vary according to site-specific characteristics; therefore, spatially-explicit information should be used to accurately assess costs, benefits and targets for REDD+ resources. In Chapter 3, I estimated the spatially-explicit cost-effectiveness of protecting, restoring and sustainably managing tropical forests across Indonesia. I found that when spatial variation in costs and benefits was considered, low-cost options emerged even for the two most expensive strategies: protecting forests from conversion to oil palm and timber plantations. This analysis demonstrated that no single strategy could reduce emissions at low-cost across Indonesia, but that there are cost-effective locations for all strategies.

In summary, this research was designed to comparatively evaluate the financial competitiveness of a broad range of strategies for REDD+ and inform policy-makers on how to distribute REDD+ resources efficiently in Southeast Asia. It revealed two novel and important insights. First, that achieving carbon benefits through REDD+ can be much less expensive than recognised in the literature. This is owing to strategies such as reforestation, reducing illegal deforestation in protected areas and sustainable forest management, which represent cost-effective strategies for investment and have considerable scope for implementation. Second, the two most expensive strategies, avoiding further deforestation in oil palm and timber concessions, offered multiple very low-cost locations for reducing carbon at under $7 per tonne. This is owing to high variation in the costs and benefits at different sites. I was able to achieve my objectives by using quantitative tools from economics and spatial information science. Targeting cost-effective opportunities for conserving tropical forest carbon stores, which are identified in this thesis, will foster greater political support and funding for climate mitigation in Southeast Asia and support developing countries to balance the trade-offs of economic development and reducing forest-based emissions.

Item ID: 51734
Item Type: Thesis (Masters (Research))
Keywords: carbon emissions, carbon sequestration, conservation, cost-effective conservation, deforestation, financial incentives, forest degradation, forest management, oil palm, REDD+, Southeast Asia, timber, tropical forests
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Publications arising from this thesis are available from the Related URLs field. The publications are:

Chapter 2: Graham, Victoria, Laurance, Susan, Grech, Alana, McGregor, Andrew, and Venter, Oscar (2016) A comparative assessment of the financial costs and carbon benefits of REDD+ strategies in Southeast Asia. Environmental Research Letters, 11 (11). pp. 1-11.

Chapter 3: Graham, Victoria, Laurance, Susan G., Grech, Alana, and Venter, Oscar (2017) Spatially explicit estimates of forest carbon emissions, mitigation costs and REDD+ opportunities in Indonesia. Environmental Research Letters, 12. pp. 1-11.

Date Deposited: 08 Dec 2017 05:21
FoR Codes: 05 ENVIRONMENTAL SCIENCES > 0502 Environmental Science and Management > 050202 Conservation and Biodiversity @ 50%
14 ECONOMICS > 1402 Applied Economics > 140205 Environment and Resource Economics @ 50%
SEO Codes: 96 ENVIRONMENT > 9606 Environmental and Natural Resource Evaluation > 960601 Economic Incentives for Environmental Protection @ 100%
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