Climate Change and Tropical Deforestation

Transcription

1 Climate Change and Tropical Deforestation Erin O. Sills Associate Professor, Department of Forestry and Environmental Resources North Carolina State University Executive Summary. November 3, 2008 The world s forests store more carbon than the entire atmosphere. Most temperate forests including those in the US are net carbon sinks, removing CO 2 from the atmosphere. However, in the tropics, rapid deforestation is contributing 1/5 of all anthropogenic greenhouse gas emissions worldwide. Deforestation rates are particularly high in the Amazon Basin and the Indo-Malaysian region. This is primarily the result of demand for annual crops, cattle pasture, and plantation crops such as oil palm. In general in the tropics, the timber sector does not clear-cut forest, but neither does it sustainably manage forest. In combination with government road-building efforts, logging operations expand access to remote areas, lowering the cost of clearing and converting the forest to agriculture. Key incentives to clear forest are (a) demand for agricultural commodities including recent increases in biofuel prices, (b) direct government subsidies for agriculture, and (c) the greater ease of establishing and maintaining title to cleared land. Forestry (or forest management) is generally not competitive with agricultural land uses, because (a) product prices are undercut by illegal and low-cost logging on public lands, (b) research and technical support is lacking, and (c) insecure land tenure and economic conditions result in short time horizons not compatible with long-term forest management. Investing in efforts to reduce deforestation may be a cost-effective way to reduce net greenhouse gas emissions. The countries party to the UNFCC have agreed to undertake pilot and demonstration projects to assess the feasibility and co-benefits (such as biodiversity conservation and support for local livelihoods) of reducing carbon emissions from deforestation. 1

2 1. Global Forests and Carbon. The world s forests store more carbon (683 Gt in biomass, soils, deadwood and litter) than the entire atmosphere (FAO 2006). Just ten countries own two-thirds of these forests. In many of these countries including the US forests are removing carbon from the atmosphere due to stable forest area and increasing carbon storage per unit area. However, in most tropical countries, forests are being converted to agriculture. This deforestation results in large and rapid releases of carbon into the atmosphere, accounting for 1/5 of all anthropogenic greenhouse gas emissions worldwide. In recent years, two countries have had exceptionally high rates of deforestation: Brazil and Indonesia. This reflects broader regional trends. Between 2000 and 2005, South America lost 4.3 million hectares (0.5 percent), while South and Southeast Asia lost 2.9 million hectares (1 percent), of forest annually (FAO 2006). The Congo basin of Africa has the second largest area (after the Amazon) of contiguous tropical rainforest remaining in the world. While it is clear that deforestation is proceeding rapidly in some parts of the Congo basin, statistics on land use change in this region are generally less reliable. Therefore, in this note, I focus on the drivers of deforestation and therefore drivers of climate change in the Amazon basin and the Indo- Malaysian region. 2. Tropical Deforestation. Deforestation is the permanent conversion of forest to some other land cover, almost always crops, pasture, or plantations such as oil palm. The fundamental drivers of deforestation therefore are the factors that determine (1) the benefits of agricultural use, and (2) the private, local costs of clearing forest. Carbon emissions and other global externalities of forest clearing do not factor into the land use decision. In the tropics, the timber sector generally does not directly implement deforestation. Most tropical forests contain so many different tree species of varying commercial value that it is not economical to clear-cut them solely for timber; rather, the high-value timber species are harvested selectively. This can be the basis of long-term forest management, but more often, timber is mined as a non-renewable resource the best trees are removed, leaving the forest degraded (storing less carbon), more accessible, and less costly to clear. Underlying determinants of both timber extraction and other costs and benefits of deforestation include biophysical factors such as soil fertility, climate, and original forest type. Perhaps even more fundamentally, the costs and benefits of deforestation depend on accessibility. The von Thünen model provides a simple framework for thinking about the determinants of deforestation. This model posits that the profitability of any land use is higher closer to the market center. However, the profitability of some land uses (e.g., perishable crops) declines more rapidly in more remote areas. Figure 1 illustrates this concept, with just two broad land uses: agriculture and forestry, i.e., management of standing forest. Agriculture is always more profitable than forestry close to the market center. Thus, all land closer to the market center than point A would be converted to agriculture; between point A and point B, the land would be maintained and exploited as forest (forestry); and beyond point B, there would be no economical use of the land (wilderness). Of course, it is possible to imagine finer gradations of land use 2

3 (e.g., crops vs. pasture, managed vs. unmanaged forest) and different valuations by different groups of people (e.g., traditional hunter-gatherers vs. traditional ranchers). However, even the simple graph effectively makes three points: (1) deforestation increases with improved access such as new roads; (2) deforestation increases when the profitability of agriculture increases OR the profitability of forestry decreases, and (3) increasing the profitability of forestry would decrease deforestation close to the market center but expand the mining of forest resources further into the wilderness. Taken together, these explain why the role of the forestry sector is controversial (point 3), particularly because of logging roads (point 1), but is only part of the deforestation story (point 2). 3. Agricultural Drivers of Deforestation. The literature (as reviewed in Angelsen and Kaimowitz, 1999; Barbier and Burgess, 2001; Geist and Lambin, 2002; Rudel et al. 2000; and Wibowo and Byron, 1999) has consistently identified the following factors that increase agricultural profitability as key drivers of deforestation: 3.1 Demand for agricultural commodities. Recent increases in prices of food and biofuels are encouraging deforestation and therefore carbon emissions. Historically, food prices have been key drivers of deforestation. More recently, forest is being cleared for oil palm plantations in Indonesia. Research has shown that the carbon emitted when forest is cleared especially on peat soils results in far more greenhouse gas emissions than the savings from substitution of palm oil for fossil fuels (Fargione et al. 2008). Likewise, converting agricultural land to biofuels such as corn or sugarcane increases prices for displaced food crops and increases incentives to clear forest for those crops (e.g., soybeans in the Brazilian Amazon). In contrast, biofuels generated from waste products or grown on marginal lands generally do not spur more deforestation (Searchinger et al. 2008). 3.2 Agricultural subsidies and incentives. As in most of the world, tropical countries support their farmers though subsidized credit, infrastructure for processing and marketing, and publically funded research and development. International finance often underlies this support. Typically, the agricultural sector receives more public assistance than the forestry sector, increasing the profitability of clearing land for agriculture relative to maintaining land in forest. In Brazil, for example, the government continues to provide support for new agricultural colonization projects throughout the Amazon, while companies and communities seeking to implement sustainable forest management have faced challenges accessing credit lines and obtaining authorization for harvest. 3.3 Land Tenure. Historically, clearing the forest was a requirement for obtaining title to land in many parts of the tropics. Even today, deforestation helps consolidate claims to land, largely because of incomplete and overlapping property records that do not recognize traditional land tenure and that provide opportunities for powerful actors to acquire titles to vast tracks of land. 3

4 4. Forestry Drivers of Deforestation. Deforestation can also be considered the result of relatively low profits from forest management due to the following factors: 4.1 Open access forests. Indonesia, Brazil, and other countries of the Amazon Basin (e.g., Peru) still have vast areas of forest, much of it officially unclaimed and essentially open access. Thus, there is no forest scarcity to signal the value of remaining forests. In contrast, forest area has been expanding in countries such as India and China, which have much less forest per capita and a much more evident need for forest to produce fuelwood, timber, and other goods. Unclaimed tropical forests are also vulnerable to illegal logging. As a result, any land owner who attempts to manage forest must compete with many more actors who are illegally mining the forest - extracting the most valuable timber at the lowest cost by ignoring regulations and avoiding taxes and fees, thereby suppressing market prices for timber. 4.2 Difficulty of management. Markets for many forest services including carbon and biodiversity are incipient at best and very difficult for remote land managers to access. While markets for timber and non-timber products are more accessible, there has not been sufficient R&D for sustainable and profitable forest management. Relative to tropical crops, both international and national agencies have under-invested in the development of natural forest management. 4.3 Short time horizons. Whether because of lack of access to credit, insecure land tenure, or general political and economic insecurity, land managers on tropical forest frontiers tend to use very high discount rates. While some alternative land uses such as oil palm are also more profitable at lower discount rates, in general, higher discount rates make long-term forest management less appealing than mining the highest value trees and converting to agriculture. 5. Economic Development and Deforestation. Economic development both drives and depends on deforestation in the Amazon and Southeast Asia. For example, the booming Brazilian economy has driven up domestic demand for timber and beef, and has been driven by increasing exports of timber and soybeans. In the long run, these regions could follow a similar pattern as the temperate zones including the US where economic development eventually led to increased value being placed on forest (e.g., for recreation and ecosystem services such as carbon sequestration) and to a shift away from an agricultural-based economy. This pattern has been called the Environmental Kuznets Curve. The result in the US has been expansion of forest area, which has effectively reduced our net global greenhouse gas emissions. 6. Deforestation as Cause and Consequence of Climate Change. Climate change itself could contribute to tropical deforestation, especially through forest fires. Many climate models predict drying in Indonesia (Canadell and Raupach 2008), creating favorable conditions for fires that would release the vast stocks of carbon in the biomass and soils of peat swamp forests into the atmosphere (Jaenickea et al. 2008). For example, the 4

5 1997/98 fires associated with El Niño in Southeast Asia emitted substantial amounts of carbon in addition to imposing enormous costs in terms of lost timber and agricultural production and human health problems associated with smoke (Murdiyarso and Lebel 2007). In the Amazon, concern focuses on the southeast, where many models of climate change predict a more intense dry season (Malhi et al. 2008). In combination with logging that increases fuel loads in the forest and slash-and-burn deforestation that provides ignition sources, this could also create the conditions for massive forest fires with severe consequences for the regional economy, public health, and the global climate. 7. Reducing Emissions from Deforestation Because tropical deforestation is a significant cause of climate change, and at the same time imposes other environmental costs such as loss of biodiversity and disruption of hydrological cycles, there is increasing interest in reducing deforestation as a means to reduce greenhouse gas emissions. Relative to the cost of reducing emissions from the transportation, electricity, and industrial sectors, the costs of reducing deforestation by up to 50% are projected to be much lower (Kindermann et al. 2008; Gullison et al. 2007). Of course, measuring and appropriately crediting the amount of carbon emissions averted by preventing deforestation also presents enormous technical and political challenges. At the 2007 United Nations Climate Change Conference in Bali, the countries party to the UNFCC agreed to support pilot and demonstration projects and further research on reducing emissions from deforestation and forest degradation (UNFCC 2008). One proposal is to make direct payments to landowners conditional on forest conservation. As discussed above and illustrated in figure 1, this would be most effective if accompanied by measures that reduce the returns to clearing forest and increase the profitability of sustainable forest management. Such a policy framework has the potential to benefit both local people living in tropical forests and the entire world that urgently needs cost effective means to combat global climate change. 5

6 Figure 1 Deforestation model based on von Thünen $ Agricultural Profit per Hectare Forestry Profit per Hectare Market Center A B Most Remote Deforested Forestry Wilderness 6

7 References. Angelsen, A. and D. Kaimowitz Rethinking the Causes of Deforestation: Lessons from Economic Models. The World Bank Research Observer 14(1): Barbier, E.; Burgess, JC The economics of tropical deforestation. Journal of Economic Surveys 15(3): Canadell, J.G. and M.R. Raupach Managing Forests for Climate Change Mitigation. Science 320: Fagione, J., J. Hill, D. Tilman, S. Polasky, and P. Hawthorne Land Clearing and the Biofuel Carbon Debt. Science 319: FAO Global Forest Resources Assessment 2005: Progress Toward Sustainable Forest Management. United Nations Food and Agricultural Organization Forestry Paper 147. Geist, H.J. and E.F. Lambin Proximate Causes and Underlying Driving Forces of Tropical Deforestation. BioScience 52(2): Gullison, R.E., P.C. Frumhoff, J.G. Canadell, C.B. Field, D.C. Nepstad, K. Hayhoe, R. Avissar, L.M. Curran, P. Friedlingstein, C.D. Jones, and C. Nobre Tropical Forests and Climate Policy. Science 316: Jaenickea, J., J.O. Rieleyb, C. Mottc, P. Kimmand and F. Siegerta Determination of the amount of carbon stored in Indonesian peatlands. Geoderma 147(3-4): Kindermann, G., M. Obersteiner, B. Sohngen, J. Sathaye, K. Andrasko, E. Rametsteiner, B. Schlamadinger, S. Wunder, and R. Beach Global cost estimates of reducing carbon emissions through avoided deforestation. Proceedings of the National Academy of Sciences 105(30): Malhi, Y., J.T. Roberts, R.A. Betts, T.J. Killeen, W. Li, and C.A. Nobre Climate Change, Deforestation, and the Fate of the Amazon. Science 319: Murdiyarso, D. and L. Lebel Local to global perspectives on forest and land fires in Southeast Asia. Mitigation and Adaptation Strategies for Global Change 12: Rudel, T.K., K. Flesher, D. Bates, S. Baptista, and P. Holmgren Tropical deforestation literature: geographical and historical patterns. Unasylva 203 (51): Searchinger, T., R. Heimlich, R.A. Houghton, F. Dong, A. Elobeid, J. Fabiosa, S. Tokgoz, D. Hayes, and T. Yu Use of US Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land-Use Change. Science 319: UNFCC Reducing emissions from deforestation in developing countries: approaches to stimulate action. Decision 2/CP.13. United Nations Framework Convention on Climate Change, Report of the Conference of the Parties on its thirteenth session, held in Bali from 3 to 15 December Wibowo, D.H. and R.N. Byron Deforestation mechanisms: a survey. International Journal of Social Economics 26(1-2-3): Biography. Dr. Erin O. Sills is an associate professor in the Department of Forestry and Environmental Resources at NC State University. She received her BA in International Development and Latin American Studies at Princeton University, her MA in Natural Resource Economics and Policy and PhD in Natural Resource and Environmental Economics at Duke University. Research interests include the economics of forest management for non-timber benefits and rural development, international forest policy and sustainable forest management, deforestation and land use in the tropics and economic assessment of invasive species policy. 7