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Agroforest Carbon Finance Schemes in Indonesia
- a Case Study in Central Sulawesi
Christina Seeberg-Elverfeldt
Food and Agriculture Organization of the United Nations (FAO)Rome, Italy
University of GöttingenGöttingen, Germany
26th August 2009World Congress of Agroforestry 2009, Nairobi, Kenya
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How much do you have to pay him to stop cutting the tree?
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Problem statement
Surroundings of Lore Lindu National Park in Central Sulawesi, Indonesia
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Problem statement: Vicious cycle of poverty and
deforestation
Poverty of local
ethnic groups
Encroachment &
Deforestation
Land sales to migrants
Expenditures for
ceremonial purposes
Cocoa boom: 230% area increase in 20 years
30% of land acquired by clearing primary forest
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Objective• Assess the impact of
carbon payments on smallholder households
• Evaluate the potential of carbon credits to provide an incentive for adoption of sustainable land-use systems
• Assess the potential of carbon payments to contribute to the conservation of the rainforest
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• 4 household classes (HHI ; HHII ; HHIII ; HHIV) characterised on basis of dominant cocoa agroforestry system
• 4 cocoa agroforestry systems: I – II – III – IV
• Linear programming model, maximising farm level gross margin
I III
II IVShade tree cover
Management intensity
Sustainability
Methodology
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Characteristics of household classes
Household class
Attributes HHI HHII HHIII HHIV
Poverty Index Poorest Poor PoorBetter-
off
Ethnicity (% migrants)
0 19 22 80
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0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
HH I HH II HH III HH IV
TG
M (
IDR
(000
)/yr
)
Results (1)
Scenario 1 & 2: Impact of carbon payments on household income
Total Gross Margin – Baseline Situation
1€=11,500 IDR (2006)
Scenario 1: Impact of carbon credits on TGM
0
2
4
6
8
10
12
14
16
18
20
HH I HH II HH III HH IV
Pe
rce
nta
ge
im
pa
ct
on
TG
M
Scenario 1CER €5
Scenario 2CER €25
Scenario 2:Impact of carbon credits on TGM
0
2
4
6
8
10
12
14
16
18
20
HH I HH II HH III HH IV
Pe
rce
nta
ge
im
pa
ct
on
TG
M
Scenario 1CER €5
Scenario 2CER €25
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Results (2)
Scenario 3: Incentives for environmentally friendly agroforestry systems
Carbon certificates: Price premiums for shade grown, biodiversity rich & sustainable cocoa agroforestry systems I and II
Household Class
HHI HHII HHIII HHIV
Minimum credit price (CER/tCO2e) € 14 € 27 € 32 €185
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Results (3)
Scenario 4: Incentives for rainforest conservation
Carbon certificates to prevent further deforestation activities (REDD)
Emission reduction from reduced deforestation may be among the least-expensive mitigation options available (IPCC 2007, Stern Review 2006)
Household Class
HHI HHII HHIII HHIV
Minimum credit price (CER/tCO2e avoided) € 1 € 10 € 23 € 54
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Conclusions
• The impact of payments on households depends on the prices they obtain on the carbon markets
• Solution to vicious cycle of deforestation & poverty: Target carbon sequestration payments to shade intensive agroforestry systems I & II
“Win-Win-Win” situation:– income of poorest, local households increased – encroachment process at NP forest margin
stopped– environmentally friendly land-use systems
(carbon sequestration, biodiversity) promoted
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Linear Programmin
g Model
Data land-use systems
Carbon annuity
payments
Agricultural activities
Carbon budget cocoa & shade
trees
Resource endowmen
ts
Carbon credits (tCER) 5 –30
€/tCO2
Assumptions...
Objective function: Maximise farm level gross margin
4 household classes (HHI – HHII - HHIII - HHIV )