An analysis of forestry carbon sequestration as a response to climate change.

preface COPENHAGEN CONSENSUS ON CLIMATE copenhAgen consensus on climAte The Copenhagen Consensus Center has commissioned 21 papers to examine the costs and benefits of different solutions to global warming. The project’s goal is to answer the question: “If the global community wants to spend up to, say $250 billion per year over the next 10 years to diminish the adverse effects of climate changes, and to do most good for the world, which solutions would yield the greatest net benefits?” The series of papers is divided into Assessment Papers and Perspective Papers. Each Assessment Paper outlines the costs and benefits of one way to respond to global warming. Each Perspective Paper reviews the assumptions and analyses made within an Assessment Paper. It is hoped that, as a body of work, this research will provide a foundation for an informed debate about the best way to respond to this threat. Terrestrial ecosystems store approximately 1 trillion tons of CO2 in the biomass of living trees and plants. Current estimates suggest that it would be possible to increase this carbon efficiently in order to reduce the future damages of climate change. The methods that could be used include afforestation (planting old agricultural land in trees), reduced deforestation, and forest management. Current estimates in the literature accounting for opportunity costs and implementation and management costs suggest that an additional 6.8 billion tons CO2 per year may be sequestered in forests by 2030 for $30 per ton CO2. Around 42% of this would arise from avoided deforestation, with the rest roughly equally split between afforestation and forest management options. Analysis indicates that if society follows an “optimal” carbon abatement policy, as defined in Nordhaus (2009), forestry could accomplish roughly 30% of total abatement over the century. If society instead places strict limits on emissions in order to meet a 2oC temperature increase limitation, then the component forestry provides lowers overall abatement costs by as much as 50%. The benefit cost ratio in the optimal scenario is 1.0, while it is 1.8 in the 2oC limiting case. The results of the benefit cost analysis do not substantially change with a lower interest rate, and they also do not substantially change when transactions costs are included. This rather optimistic economic analysis is useful, but it does not account directly for leakage. Given that the literature suggests that leakage could be as large as 90% 100%, it would have large implications for costs, potentially reducing the benefit cost ratio below 1. Importantly, leakage can only be reduced by including more countries into the control program. The paper also does not account for other potential benefits of adding forestland over time. These benefits are ecological in nature, and they are difficult to measure systematically across the globe. They do, however, represent a potentially large, additional, benefit of a forestry carbon sequestration program.