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Under a carbon market, projects that promote afforestation through plantation forestry may be attractive to many prospective investors, given their potential to generate profitable financial returns in addition to carbon credits (Frumhoff et al., 1998). The potential impacts of projects that are designed to promote afforestation through plantation forestry will vary significantly with location, scale, use of native versus exotic tree species, and intensity of management. Intensively managed plantations, for example, can help maintain and improve soil properties, particularly if understory vegetation and leaf litter is not cleared (Chomitz and Kumari, 1998), as well as providing a source for biomass fuels and other wood products. They can have highly variable impacts on water resources (Section 2.5.1). Plantations typically do not appear to reduce pressure on natural forests in the humid tropics (Kanowski et al., 1992; Johns, 1997) because these forests are not generally cleared for the sawn wood, pulpwood, or other products that plantations provide. Kanowski et al. (1992) suggest that fuelwood plantations might help reduce pressure on natural woodlands in relatively arid regions. Thus, they might help to stem desertification in some settings.
Plantation projects would have negative impacts on biodiversity if they replace native grassland or woodland habitat or if permanent plantations of exotic species were planted in sites where natural or assisted restoration of indigenous forests is feasible. Many grassland ecosystems, for example, are rich in endemic species; in the Mpumalanga province of South Africa, the expansion of commercial plantations (Eucalyptus spp. and Pinus spp.) has led to significant declines in several endemic and threatened species of grassland birds (Allan et al., 1997).
In contrast, nonpermanent plantations of exotic or native species can be designed to enhance biodiversity co-benefits by jump-starting the process of restoring natural forests (Keenan et al., 1997; Lugo, 1997; Parrotta et al., 1997a,b). Commercial forestry plantations can also increase biodiversity co-benefits by adopting longer rotation times, reducing or eliminating measures to clear understory vegetation, using native tree species, and minimizing chemical inputs (e.g., Allen et al., 1995a,b; Da Silva et al., 1995).
Afforestation or reforestation measures could have positive or negative impacts on local communities. Negative impacts can result if projects are implemented on land for which communities have alternative priorities, such as agricultural production, and if communities are not effectively engaged in all phases of project design and implementation (Cullet and Kameri-Mbote, 1998; Section 6.6.3). In urban or peri-urban areas, they can also produce significant local socioeconomic benefits through improvements in air quality (McPherson, 1994).
Some observers have expressed concern that carbon-offset financing for reforestation projects in non-Annex I countries could promote deforestation by financing the expansion of plantations that replace natural forests whose associated emissions would not be constrained by a national cap (German Advisory Council on Global Change, 1998). Section 2.5.2.2 discusses possible options, should Parties wish to constrain such projects.
Agroforestry activities can sequester carbon and produce a range of environmental and socioeconomic benefits. For example, trees in agroforestry farms improve soil fertility through control of soil erosion, maintenance of soil organic matter and physical properties, increased nutrient inputs through nitrogen fixation and uptake from deep soil horizons, and promotion of more closed nutrient cycling (Young, 1997). Thus, agroforestry systems that incorporate trees on farms can improve and conserve soil properties (Nair, 1989; MacDicken and Vergara, 1990), as is the case in the AES Thames Guatemala project (Dixon et al., 1993). Agroforestry projects also may provide local economic benefits, with farmers gaining higher income from timber, fruits, medicinals, and extractives than they would from alternative agricultural practices (Cooper et al., 1996).
Poorly planned and implemented agroforestry projects, however, can fail to benefit or have negative impacts on local farmers. For example, the introduction of labor-intensive agroforestry technologies can lead to labor competition between agroforestry practices and traditional farming (Laquihon, 1989; Repollo and Castillo, 1989). Poorly planned projects can also lead to excessive light and water competition between crops and trees, as well as reducing the area available for food crops.
The associated environmental benefits of project activities that promote assisted regeneration of natural forests are similar to those of forest conservation. As the forest matures, key benefits may include protection of watersheds, soil fertility, and biodiversity. As with forest conservation or plantation forestry, assisted forest regeneration could lead to negative social impacts if communities are prevented from changing to preferred land uses in the future. This negative impact also can be reduced by ensuring that the designation of areas for reforestation is consistent with long-term regional land-use plans and that community development priorities are effectively incorporated during project development and implementation (Section 5.6).
There is very limited experience of LULUCF pilot projects that sequester carbon or reduce carbon emissions from agricultural soils. There are vast areas of degraded and desertified land in developed and developing countries, however, where well-designed projects can add carbon to the soil while increasing agricultural productivity and sustainability.
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