Abstract ID: 344

Valuing the forest carbon stocks of the Brazilian Amazon

There is a potential for negotiating, under the UNFCCC, nation-wide compensations for reduction of GHG emissions from tropical deforestation and forest degradation (REDD), which contribute approximately to 1/5th of global, human-induced, annual emissions. REDD programs should begin with an estimate of the opportunity costs for maintaining forests on lands that would provide higher rents under agricultural or livestock production. This estimate provides a benchmark for a national REDD program. We have estimated the opportunity costs of complete forest conservation for the Brazilian Amazon using spatially-explicit models of potential rents from soy, cattle and timber production. For each forested parcel (4 km2), net present values (NPV) for each land use (soy, cattle, and timber) are calculated for 30 years, assuming a 5% per year discount rate. The soy rent model was developed by coupling a yield model with a cost model. It is constrained on lands with restrictions to mechanized production and with excessive moisture. The cattle rent model consists of a herd growth model coupled to a cost model. It estimates annual profits through the initiation, establishment, and consolidation phases of cattle ranching development. The timber rent model is developed using a transportation cost model, a processing center function that expands, contracts, and creates processing centers depending upon available commercial volume, and assumes a 30-year rotation period. For the purposes of this exercise, we assume that each processing center will harvest only 1/30th of its available volume, forcing the industry into a sustainable mode. All models are run into the future with a plausible schedule of road paving and waterway development. Thus, the rents are sensitive to infra-structure improvement. The opportunity costs of forest maintenance are estimated in two ways: (a) maximum potential NPV (for soy or cattle pasture), and (b) maximum potential NPV (for soy or cattle pasture) minus the potential NPV for sustainable timber management. The spatial costs of carbon are obtained dividing the map of opportunity costs by a map of forest carbon stocks. The average opportunity cost of forest protection for the Brazilian Amazon forestlands is US$5 per ton of carbon and the total Amazon carbon stock of 47 billion tons amounts, in present day value, to approximately U$ 240 billion. However, it would cost Brazil only US$126 billion in forgone profits to fully compensate the opportunity costs of conserving 88% of the Brazilian Amazon forests, containing the equivalent of 42 billion tons of carbon.

Session:  Public Policies and Sustainable Development - Policy scenarios for sustainable development.

Presentation Type:  Oral