New Forests

, Volume 26, Issue 2, pp 101–136 | Cite as

Economics of wastelands afforestation in India, a review

  • Kulbhushan Balooni
Article

Abstract

India has vast tracts of wastelands. Afforestation of these wastelands is one of the many alternative uses of such lands. Given the scarcity of capital in India, it becomes imperative to determine the economics and financial feasibility of wastelands afforestation projects. The studies reviewed in this paper deal with cost and financial feasibility analysis of wastelands afforestation projects in India. The main rationale behind this review is to examine the prospects of increasing investments in the afforestation projects. This also has a global significance, since afforestation augments carbon sequestration, which has become an exigency in view of externalities associated with global warming. The study uses review of existing literature and regression analysis as analytical tools. The review reveals that reclamation of wastelands through afforestation is not an expensive venture in India. Afforestation projects are financially viable even when no environmental benefits are taken into consideration. The results of the study suggest that polluting companies/countries should explore the possibility of investing in afforestation in India to gain carbon credits economically, once the parties to the Kyoto Protocol to the United Nations Framework Convention on Climate Change decide to approve it. The studies reviewed reveal that researchers have used different sets of criteria for financial feasibility analysis of the afforestation projects. Almost all the studies have ignored non-market benefits of afforestation projects. Such methodological differences need to be addressed in view of the increasing importance of plantations as carbon sinks. Some socioeconomic issues like investment in tree crops vis-à-vis agricultural crops, preference for mixed plantation and wastelands development as a means of resource development have also emerged from this review.

Afforestation costs Afforestation with peoples' participation Carbon sink Financial feasibility analysis Investment in tree crops vis-à-vis agricultural crops Private and social discount rate 

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© Kluwer Academic Publishers 2003

Authors and Affiliations

  • Kulbhushan Balooni
    • 1
  1. 1.Calicut REC (PO)Indian Institute of Management (IIMK)KozhikodeIndia

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