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Designing Payments for Ecosystem Services: Lessons from Previous Experience with Incentive-Based Mechanisms

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Designing Payments for Ecosystem Services: Lessons from Previous Experience with Incentive-Based Mechanisms
Global cost estimates of reducing carbon emissions through avoided deforestation
Georg Kindermann*, Michael Obersteiner*, Brent Sohngen†‡, Jayant Sathaye§, Kenneth Andrasko¶, Ewald Rametsteiner*, Bernhard Schlamadinger , Sven Wunder**, and Robert Beach††
*International Institute of Applied Systems Analysis, A-2361 Laxenburg, Austria; †Department of Agricultural, Environmental, and Development Economics, Ohio State University, Columbus, OH 43210; §Lawrence Berkeley National Laboratory, Berkeley, CA 94720; ¶U.S. Environmental Protection Agency, ´ Washington, DC 20460; TerraCarbon, 8043 Graz, Austria; **Center for International Forestry Research, CEP 66.095-100 Belem-PA, Brazil; and ††RTI International, Research Triangle Park, NC 27709 Edited by Pamela A. Matson, Stanford University, Stanford, CA, and approved May 20, 2008 (received for review November 8, 2007)

Tropical deforestation is estimated to cause about one-quarter of anthropogenic carbon emissions, loss of biodiversity, and other environmental services. United Nations Framework Convention for Climate Change talks are now considering mechanisms for avoiding deforestation (AD), but the economic potential of AD has yet to be addressed. We use three economic models of global land use and management to analyze the potential contribution of AD activities to reduced greenhouse gas emissions. AD activities are found to be a competitive, low-cost abatement option. A program providing a 10% reduction in deforestation from 2005 to 2030 could provide 0.3– 0.6 Gt (1 Gt 1 105 g) CO2 yr 1 in emission reductions and would require $0.4 billion to $1.7 billion yr 1 for 30 years. A 50% reduction in deforestation from 2005 to 2030 could provide 1.5–2.7 Gt CO2 yr 1 in emission reductions and would require $17.2 billion to $28.0 billion yr 1. Finally, some caveats to the analysis that could increase costs of AD programs are described. carbon sequestration climate change reducing emissions from deforestation and ecosystem

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