FOREST CARBON EMISSION

ABATEMENT AND

SEQUESTRATION IN A GLOBAL

CONTEXT

Brent Sohngen, Ohio State University

Sara Ohrel, USEPA

Suk-won Choi, Ohio State University

Disclaimer

Thoughts & concepts expressed today are

those of the presenters only and do not

reflect any position or sentiment of the

U.S. Environmental Protection Agency.

Points

• Early estimates suggested low costs and high quantities

• Modeling advancements have increased costs, but forest carbon should be around 30% of total abatement globally.

• Large proportion of the abatement should arise from land management in addition to land use change.

• Models are also relevant for calculating effects of implementation choices (leakage, transactions costs, etc.).

Forest Carbon Sequestration: Early Literature

• Range of estimates: $1 - $187

– Stokes and Richards, 1995, 2000

– Sedjo et al., 1995

• IPCC Second Assessment Concludes (1996):

– 60-87 billion tons carbon could be sequestered

– Up to 700 million hectares of land

– Cost = $2 - $8 per ton

Early U.S. Studies

Study Discount

Carbon

Approx.

Annual Flux

(million tons

per year)

Marginal

Cost

($$ per ton)

Sedjo (1989) No 2900 $3.50

Moulton and Richards (1990) No 23 – 45 $9 – 11

Adams et al (1993) No 29 – 56 $13 – 19

Parks and Hardie (1995) No 44 – 88 $21 – 51

Stavins (1999) Yes 518 < $136

Plantinga et al. (1999)1 Yes 0.8 - 3.7 $15 - $90

Adams et al. (1999) Yes 16 – 73 $5 – 21

Concerns with earliest studies

• Static – Forests are dynamic; decisions today have long-term

effects (user cost)

– Investments

• Prices exogenous – Large scale policies will alter prices and influence

efficiency.

• Lack of global policy coverage – Other regions likely will engage in stronger policy than

the US.

Concerns with earliest studies

• Static – Forests are dynamic; decisions today have long-term

effects (user cost)

– Investments

Initial

0

1

2

3

4

5

6

7

8

10 20 30 40 50 60Age

Millio

n H

ecta

res

Baseline

High DamageYear 20

0

2

4

6

8

10

12

14

10 20 30 40 50 60

Age

Millio

n H

ecta

res

Baseline

High Damage

Southern US Mixed Forest

Initial Age Class Distribution

Southern US Mixed Forest

Age Class Distribution at Year 20

Concerns with earliest studies • Prices exogenous

– Large scale policies will alter prices and influence efficiency.

Concerns with earliest studies • Lack of global policy coverage

– Other regions likely will engage in stronger policy than the US.

Total Carbon Storage Forestland Area C Intensity

Billion Tons % Million ha % Tons/ha Boreal/Temperate/Mid-Latitude

North Am. 277 24% 729 18% 380 Europe 34 3% 279 7% 122 Russia 323 28% 887 21% 364 China 33 3% 132 3% 250 Oceania 51 4% 398 10% 128

Subtotal 718 63% 2,425 58% 298

Tropical/Low-Latitude

South Am. 222 19% 888 21% 250 Asia-Pacific 91 8% 312 8% 292 Africa 115 10% 525 13% 219

Subtotal 428 37% 1,725 42% 248

Global Total 1,146 100% 4,150 100% 277

Source: Dixon et al. (1999; 1994)

Dynamic models

• Developed in 1990s

– Continually enhanced to present

• Range of regional coverage

• Fixed many of the earlier problems

– Consider the investment problem

– Prices are endogenous.

Results from dynamic models

• Forest carbon sequestration involves land use and management, in roughly equal proportions

• Nearly all regions of the world can participate in forest carbon sequestration

• Program can continue to deliver carbon over time (not just an initial benefit)

• Can account for 30% of total abatement activity this century.

• Land use has potentially large implications for carbon prices/climate policy

• Market leakage an important consideration.

Results from dynamic models

• Forest carbon sequestration involves land use and management, in roughly equal proportions.

Temperate Zone (AEA, 20 yr, r=5%)

0.00

0.30

0.60

0.90

10 20 50 100

$/t C

Pro

port

ion Set-aside %

Market %

Mgmt %

Age %

Aff/Def %

Tropical (AEA, 20 yr, r=5%)

0.00

0.20

0.40

0.60

0.80

1.00

10 20 50 100

$/t C

Pro

port

ion

Mgmt %

Age %

Aff/Def %

Temperate Zone (AEA, 100 yr, r=5%)

0.00

0.30

0.60

0.90

10 20 50 100

$/t C

Pro

po

rtio

n

Set-aside %

Market %

Mgmt %

Age %

Aff/Def %

Tropical (AEA, 100 yr, r=5%)

0.00

0.20

0.40

0.60

0.80

1.00

10 20 50 100

$/t C

Pro

po

rtio

n

Mgmt %

Age %

Aff/Def %

Sohngen, B., A. Golub, and T.W. Hertel. 2009. "The Role of Forestry in Carbon Sequestration in General Equilibrium Models. Chapter 11 in Economic

Analysis of Land Use in Global Climate Change Policy, edited by T.W. Hertel, S.K. Rose, and R.S.J. Tol. New York: Routledge. 343 p.

Results from dynamic models

• Nearly all regions of the world can

participate in forest carbon sequestration

Sohngen, B. 2010. Forestry Carbon Sequestration. Chapter 3 in Smart Solutions to Climate Change: Comparing Costs and Benefits. Edited by B.

Lomborg. Cambridge: Cambridge University Press. 413 p.

Sohngen, B. 2010. Forestry Carbon Sequestration. Chapter 3 in Smart Solutions to Climate Change: Comparing Costs and Benefits. Edited by B.

Lomborg. Cambridge: Cambridge University Press. 413 p.

Tons CO2

Sequestered

In 2030 per

Current ha

Of forest.

4-6

3.7 2.5

0.9 0.5

0.5

0.2

1.7

Results from dynamic models

• Program can continue to deliver carbon

over time (not just an initial benefit)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2010 2030 2050 2070 2090

Mill

ion

t C

O2

pe

r ye

ar

Optimal Scenario

2 Deg. C Limit

$0

$20

$40

$60

$80

$100

$120

$140

2010 2030 2050 2070 2090

$/t

CO

2

Optimal Scenario

2 Deg C Limit

Sohngen, B. 2010. Forestry Carbon Sequestration. Chapter 3 in Smart Solutions to Climate Change: Comparing Costs and Benefits. Edited by B.

Lomborg. Cambridge: Cambridge University Press. 413 p.

Results from dynamic models

• Can account for 30% of total abatement

activity this century.

2030 2050 2100

Optimal

Cum. (Gt CO2) 225 515 1616

% Forest 65% 52% 30%

% Energy 35% 48% 70%

2 deg

Cum. (Gt CO2) 238 575 2410

% Forest 63% 50% 34%

% Energy 37% 50% 66%

Sohngen, B. 2010. Forestry Carbon Sequestration. Chapter 3 in Smart Solutions to Climate Change: Comparing Costs and Benefits. Edited by B.

Lomborg. Cambridge: Cambridge University Press. 413 p.

Results from dynamic models

• Land use has potentially large implications

for carbon prices/climate policy

$0

$50

$100

$150

$200

$250

$ p

er

ton

CO

2

2 Deg C (Energy Only)

2 Deg C (Energy + Forestry)

40% red.

In carbon

prices

Sohngen, B. 2010. Forestry Carbon Sequestration. Chapter 3 in Smart Solutions to Climate Change: Comparing Costs and Benefits. Edited by B.

Lomborg. Cambridge: Cambridge University Press. 413 p.

Results from dynamic models

• Market leakage an important consideration.

• Range: 10 – 90% – (Alig, 1997; Murray et al., 2004; Sohngen and

Brown, 2004)

– Smaller range for afforestation projects

(10 – 50%)

– Larger range for forest protection projects

(10 – 90%)

• Activity shifting estimates smaller

Empirical vs Optimization?

Conclusions

• Dynamic models have provided numerous

policy relevant insights

• Additional challenges do remain:

– Global modeling of additional sectors (biofuels;

agriculture)

– Influence of climate change on carbon

sequestration

– Modeling uncertainty