Costs and Carbon Sequestration Assessment for REDD+ in Indonesia

Abstract

Research Highlights: Our findings highlight that the contribution of carbon sequestration from plantations to REDD+ will remain limited, and that opportunity costs in Southeast Asia will likely increase, due to future oil palm expansion. Background and Objectives: Land use, land-use change, and forestry (LULUCF) are significant sources of carbon emissions. The United Nations Framework Convention on Climate Change (UNFCCC) agreed that the Reducing Emissions from Deforestation and Forest Degradation Plus program, also known as REDD+, could contribute to carbon sinks in tropical regions. These reductions could serve as carbon credits that offset emissions from other sources. Materials and Methods: This study uses the cellular automaton technique to simulate the business-as-usual (BAU) scenario and the gain-loss method, to measure carbon emissions resulting from forest conversion. The output of the integration of the models makes it possible to evaluate one of the most important financial costs: opportunity costs. Two scenarios (with and without consideration of carbon sequestration) in rubber and oil palm plantations are examined. Results: A sensitivity assessment in Kalimantan, Indonesia, shows that carbon sequestration from plantations affects value of opportunity costs less than social discount rates. Further analysis suggests that oil palm plantations have a greater impact than rubber plantations. Conclusions: Our study provides a case that can be applied to other regions for evaluating the impacts of plantation carbon sequestration, and insights that can help local policymakers design a financially attractive REDD+ program in other forest areas of the world.