THE ROLE OF FORESTRY IN CLIMATE CHANGE AND SUSTAINABLE ENERGY PRODUCTION - Economics of Sustainable Energy in Agriculture - page 134

3.

There is uncertainty about (current and future) stumpage values and
prices of agricultural products, and this makes landowners reluctant to
convert agricultural land to forestry.
Little is known about the potential of wood from afforested land as a
biomass fuel (discussed in section 3 below).
Research suggests that planting trees where none existed previously
decreases surface albedo that offsets the negative forcing expected
from C uptake (Berts 2000). Indeed, in some cases, a forestation
program may even contribute to climate change rather than mitigating
it as expected. This is more of a problem with coniferous than
deciduous species, however, although it would not be entirely absent in
hybrid poplar plantations.
There is the problem of leakages: Large-scale afforestation and/or
other forest plantations are bound to lower wood fibre prices, with
current woodlot owners (say in the US South) reducing their forest
holdings by converting land back to agriculture in anticipation. These
are generally ignored in calculating the costs of individual afforestation
or reforestation projects. Yet, such leakages can be substantial, even as
high as one-half of the C sequestered by the new plantations (Sohngen
and Sedjo 1999).

4.

5.

6.

2.3 Forest activities in developing countries and the Clean
Development Mechanism

It may be less costly for private companies, such as utilities, to invest in
forest activities in developing countries via Kyoto's CDM than to invest in
boreal forest regions. This can be seen from Table 10.5, where examples of
C-uptake costs for forestry projects in six tropical countries are provided. 3
Plantation forests and agroforestry are profitable even in the absence of C-
uptake benefits, while protection of tropical forests or simply delaying (or
slowing down) logging activities in tropical regions can yield immediate C
benefits at relatively little cost (Frumhoff et al. 1998). Clearly, there are
going to be few terrestrial C-uptake projects in Canada, Russia, Sweden
and maybe even the USA that can compete with projects in developing
countries.
The only drawback of the CDM approach is that developing
countries may lack political stability, and the required institutions and
infrastructure, to make verification and enforcement possible, although this
is likely not true of all countries. This increases transaction costs. But some
of the problems of developing countries might also apply to developed
countries. For example, verification of various potential C sinks, such as
wood product and soil sinks, will be difficult no matter where they occur. It