Abstract
Afforestation and reforestation (A/R) projects generate greenhouse gas (GHG) reduction credits by removing carbon dioxide from the atmosphere through biophysical processes and storing it in terrestrial carbon stocks. One feature of A/R activities is the possibility of non-permanence, in which stored carbon is lost though natural or anthropogenic disturbances. The risk of non-permanence is currently addressed in Clean Development Mechanism (CDM) A/R projects through temporary carbon credits. To evaluate other approaches to address reversals and their implications for policy and investment decisions, we assess the performance of multiple policy and accounting mechanisms using a forest ecosystem simulation model parameterized with observational data on natural disturbances (e.g., fire and wind). Our analysis finds that location, project scale, and system dynamics all affect the performance of different risk mechanisms. We also find that there is power in risk diversification. Risk management mechanisms likewise exhibit a range of features and tradeoffs among risk conservatism, economic returns, and other factors. Rather than relying on a single approach, a menu-based system could be developed to provide entities the flexibility to choose among approaches, but care must be taken to avoid issues of adverse selection.
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http://www.ncdc.noaa.gov/stormevents/ftp.jsp Cited 6 August 6 2012.
http://www.spc.noaa.gov/faq/tornado/f-scale.html Cited 6 August 2012.
Thresholds are based on categories and descriptions of loss detailed on pp 350–1 in Mason (2002), though the assignment of loss percentages to each threshold is ours alone. Assessing the risk of wind damage is a complicated undertaking, and we acknowledge this treatment vastly oversimplifies the effect of wind disturbance on forest stands. See, e.g., Quine (1995), Moore and Quine (2000), and Mason (2002) for more information.
See the following CDM project descriptions: http://cdm.unfccc.int/Projects/DB/JACO1260322827.04/view and http://cdm.unfccc.int/Projects/DB/JACO1245724331.7/view Cited 15 February 2012.
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Acknowledgments
The authors gratefully acknowledge the financial support and content guidance from the World Bank BioCarbon Fund team, especially Rama Chandra Reddy, Marco van der Linden, Ken Andrasko, Klaus Oppermann, and Ellysar Baroudy. The research benefited greatly from input provided at two workshops held at the World Bank in November 2011 and April 2012, as well as review comments on an earlier draft of this report by Derik Broekhoff, Peter Graham, John Kadyszewski, and Ruben Lubowski. We thank Gordon Smith, Tibor Vegh, and David Gordon for data and research assistance. All errors and omissions remain those of the author team and not the sponsors or reviewers of this work.
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Galik, C.S., Murray, B.C., Mitchell, S. et al. Alternative approaches for addressing non-permanence in carbon projects: an application to afforestation and reforestation under the Clean Development Mechanism. Mitig Adapt Strateg Glob Change 21, 101–118 (2016). https://doi.org/10.1007/s11027-014-9573-4
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DOI: https://doi.org/10.1007/s11027-014-9573-4