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Butler, R.A., Koh, L. P. and Ghazoul, J. 2009. REDD in the red: palm oil could undermine carbon payment schemes. Cons Lett 2: 67-73.
Hamilton, K., Chokkalingam, U. and Bendana, M. 2009. State of the forest carbon markets 2009. Ecosystem Marketplace Report.
Uploaded on Wednesday 01 Feb 2012
Value for the avoided CO2 emissions during a 25-year transition period from primary forest to oil palm or other land uses
Riccardo Pravettoni, UNEP/GRID-Arendal
For the focus areas Batang Toru and Tripa in the two main orangutan habitats (forest on non-peatlands and peat) it was calculated what the values (USD/ha) would be of the avoided CO2 emissions over a period of 25 years. For Batang Toru these ranged from 3,711-11,185 USD/ha and for Tripa from 7,420-22,094 USD/ha.
Net present values (NPV) per hectare were calculated using the model in Butler et al. (2009) with the following prices (range per tCO2 is USD 9.43-17, Hamilton et al. 2009). Calculations were made under a scenario where carbon prices remained constant during 25 years or appreciated 5% annually during that period). Carbon values were calculated with an equal allocation model for 25 years (Butler et al. 2009) at a 6.5% discount rate. Carbon stock in agricultural land uses was not included. Above-ground carbon assessment came from the ICRAF rapid assessment report (Tata and van Noordwijk 2010) for Tripa (forest on peat) and Batang Toru (forest on non-peat). Values for the loss of carbon in peatlands during the transition from primary forest were from Murdiyarso et al. (2010) for such transitions in Central Kalimantan. For the Batang Toru, no below-ground carbon losses were included due to a lack of data. Thus the Batang Toru values are conservative estimates. Development and management costs of a REDD project are included in the model and follow the standards of the World Bank’s Forest Carbon Partnership Facility (Butler et al. 2009). Loss of carbon sequestration by forests has not been included in the model nor that of carbon accumulation in soil and peat.