Common Tragedies

Thoughts on Environmental Economics

Seeing the forests for the trees

Posted by Daniel Hall on October 4, 2007

I went to an interesting seminar today at Resources for the Future, given by Brent Sohngen from Ohio State, on the role that forests could play in climate stabilization. He’s done some modeling that tries to get a handle on how much carbon sequestration you could get from forests globally through two means: 1) reforesting some areas of the world (called afforestation), and 2) preventing deforestation that would otherwise occur in other areas. Here’s my summary from hearing his talk and participating in the interesting discussion that followed:

1) His results showed that in theory forest sequestration could significantly contribute to global reductions in carbon emissions, accounting for around 20% of the total reductions over the next century.

2) Effectively incorporating forest sequestration into a global climate policy could reduce global costs significantly.

3) The biggest portion of available sequestration is in the developing world, and is avoided deforestation that will happen in a business-as-usual world. In fact, avoided deforestation in South America and Africa could potentially account for more than half of near-term — in the next 30 years — global emissions reductions. A much smaller portion of available sequestration is afforestation, mostly in developed countries.

4) Monitoring these reductions would have to be both local and global in scale: local because you have to account for all the trees, and global because it does the climate no good to protect one stand of trees here if someone else comes along and cuts down another strand over there. Literally every tree — globally — would have to be monitored to make this work. Project-based activities like those that many offset programs have used thus far won’t be effective because the more you specifically protect some forests the more other forests will come under pressure.

My impressions from the talk? There is a big payoff for the world in cheap reductions if we can get the rules and institutions right; however, that’s a huge if. I am somewhat — but not too — worried about the local/global scale of an effective global forest registry; I think remote-sensing satellite data can help address this. I am very skeptical, however, that in countries like Brazil or [insert any African country here] that good institutions — effective governance, private property rights, etc. — can be implemented within the next few years in order to avoid the massive amounts of deforestation that are projected to occur over the next couple decades. Basically, I think that there are too many very real but hard-to-measure transaction costs in these countries that will prevent a carbon price — even a relatively high carbon price — from translating into substantive forest sequestration.

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