Cameroon could make millions of dollars under emissions deal
Cameroon could make millions of dollars under emissions deal
mongabay.com
November 6, 2006
Cameroon could net tens of millions of dollars under a carbon-trading initiative proposed by a coalition of developing countries and under discussion this week at U.N. climate talks in Nairobi, Kenya. The key: cutting deforestation rates.
Deforestation — most of which occurs in the tropics — is responsible for about one-fifth of annual emissions of greenhouse gases. By reducing deforestation that would otherwise occur in developing countries, industrialized countries could effectively “offset” emissions limits set under international agreements like the Kyoto Protocol. Money would flow to Cameroon via an “avoided deforestation” fund financed by contributions from wealthy countries. In theory the strategy could help fight climate change at a low cost while, at the same time improving living standards for some of the world’s poorest people, safeguarding biodiversity, and preserving other ecosystem services.
Mongabay.com analysis of U.N. deforestation data suggests that an avoided deforestation initiative could be worth $10.4-172.8 million per year to Cameroon, depending on how much deforestation it could “avoid” and the market price for carbon offsets.
Between 2000 and 2005 Cameroon lost an average of 220,000 hectares of forest per year according to figures from the Food and Agriculture Organization of the United Nations (FAO). How much carbon does this represent? At the low end, FAO estimates that each hectare of Cameroon’s forest stores an average of 63 metric tons of carbon in above-ground biomass that would be otherwise released by deforestation and subsequent land conversion for agriculture or pasture. Other research suggests that net carbon released from deforestation of secondary and primary tropical forest, allowing for the carbon fixed by subsequent land use, is of the order of 100-200 metric tons per hectare. So deforestation in Cameroon releases on the order of 63-150 metric tons of carbon for each hectare of cleared or converted for agriculture. As such, Cameroon’s annual deforestation rate of 220,000 hectares may produce 13.9-33 million tons (megatons) of carbon emissions per year.
Assuming a market rate of $4 per metric ton of carbon dioxide, Cameroon’s avoided deforestation could be worth at minimum $55.6-132 million per year, using a simplified model for calculating carbon values. At the higher end, using studies that show “carbon damage” is closer to $20 per ton, avoided deforestation could be valued from $278-660 million per year. Of course determining what constitutes “avoided deforestation” is a matter of definitions but nonetheless, for a poor and indebted country funds from avoided deforestation could make an important economic contribution.
What is the opportunity cost to Cameroon of reducing its deforestation rate? Well, this is a bit more difficult to calculate but a recent World Bank study said that land worth $200-500 per hectare as pasture could be worth $1,500-$10,000 if left as intact forest and used to offset carbon emissions from industrialized countries. Using this figure, avoided deforestation could be a net economic benefit to Cameroon in addition to the ecological payoffs afforded by leaving forest intact.
Background: Cameroon once had one of the strongest economies of sub-Sahara Africa, but in the late 1990s the declining price of commodities including oil, coffee, and cocoa, hit the country very hard. The CFA Franc—the currency—was devalued, pushing rural populations to clear additional forest for subsistence crop production while encouraging the government to grant more logging concessions.
In the recovery following the economic crisis caused by the devaluation of the CFA Franc, building and public works projects increased domestic demand for timber products. In 1999 Cameroon banned the export of some endangered hardwoods, though not sapelli and ayous, the country’s largest hardwood exports. The move came after several years of heavy logging and the country’s failure to successfully implement a policy aimed at reducing raw-log exports and encouraging processed wood exports.
Lacking an effective forest conservation program and suffering from endemic and pervasive corruption—it annually ranks near the top of the list for the world’s most corrupt countries—Cameroon has found logging highly damaging to its forests which were diminished by 13.4 percent between 1990 and 2005.
This paper is based on an earlier mongabay.com article: Avoided deforestation could help fight third world poverty under global warming pact