Geoscience Reference
In-Depth Information
The assumption, that either only slash burn or all wood will be sold is unrealistic.
Thus, a scenario where Latin America has 90% slash burn and 10% selling, Africa
50% slash burned and 50% selling, and in the remaining area 10% slash burned and
90% selling, was examined. Under such scenario assumptions a carbon tax of 12 $/
tC will cut deforestation in half. Also the assumption, that a carbon price will stay
constant over time may not be close to reality but it can be used to see the long-term
infl uence of a given carbon price.
We differentiate between the following cases:
Baseline
Introducing no carbon price.
Incentives
Introducing a carbon price which will be payed periodic for the carbon stored in the
standing forest biomass.
• All: Payments are done, without considering the effectiveness of the payment,
in all regions.
• Region: Payments are done in regions where the payments protect forest against
deforestation.
• Affected: Payments are done for forests where the payments protect them
against deforestation.
Tax
Introducing a carbon price which has to be paid for releasing the stored carbon to the
atmosphere.
• Burn: All wood will be burned immediately.
• Sell: All harvested wood will be sold.
• Burn/Sell: A share of the wood will be burned and the other part sold.
Costs and Revenues Under Different Carbon Prices
The effectiveness of introducing a carbon price to influence deforestation decisions
depends largely on the levels set for carbon prices, apart from considerations of po-
litical feasibility and implementability. Low prices have little impact on deforestation
rates. During the 21st century carbon tax schemes of 9 US$/tC for slash burn and 25
US$/tC for situations when removed wood enters a harvested HWP would generate
some 2-5.7 billion US$/year respectively when emissions from deforestation are to be
cut in half. For the variant of 12 US$/tC, with regionally differentiated slash burn and
HWP assumptions, the average annual income for the next 100 years are calculated to
be around 2.7 billion US$. These tax revenues decrease dramatically over time mainly
due to the declining baseline deforestation rate. Tax revenues are computed to be 6
billion US$ in 2005, 4.3 billion US$ in 2025 and 0.7 billion US$ in 2100. This indi-
cates the magnitudes and their temporal change of funds generated from a deforesta-
tion tax scheme aiming at a 50% emission reduction (Figures 15 and 17).
