Geoscience Reference
In-Depth Information
Figure 15.
Agriculture suitability.
In the alternative incentive scheme, the amount of funds necessary, is depending
on the strategy of payments, either increasing, staying constant, or decreasing over
time. If incentives are paid only for those forest areas that are about to be deforested,
and with a global target of cutting deforestation by 50%, a minimum payment of 6
US$/tC/5 year or 0.24 billion US$ in 2006 would be required. This amount rises to
some 1.2 billion US$ in 2010, 4.1 billion US$ in 2025, and 10 billion US$ in 2100
caused by the increasing area of saved forest area. As precise information of forests
about to be deforested is absent, incentive payment schemes would have to focus on
regions under deforestation pressure. Given that incentives are only spent on regions
of 0.5° × 0.5° where they can effectively reduce deforestation in an amount that they
will balance out the income difference between forests and alternative land use up
the 6 US$/tC/5 year, this would come at a cost of 34 billion US$/year (Figures 16
and 18). It should be noted that the tax applies only on places currently deforested
while the subsidy applies to larger areas depending on how far it is in practice pos-
sible to restrict the subsidy to vulnerable areas. All fi gures above are intentionally
free of transaction costs. Transaction costs would
inter alia
include expenditure for
protecting the forests against illegal logging by force and expenditures monitor-
ing small scale forest degregation. Governance issues such as corruption and risk
adjustment, depending on the country are, however, considered in the analysis to the
extent possible.
