Cambodia Case Study—Reducing Emissions While Helping Developing Countries Achieve Sustainable Development to Implement New Climate Change Mechanisms

Promoting sustainable forest management as part of the mechanism for reducing emissions from deforestation and degradation in developing countries (REDD+) is a necessary component to future policy-making and implies that tropical forests will be considered in new climate change agreements following the end of the Kyoto Protocol term in 2012. Sasaki et al. (2010) conducted a study to assess the costs and revenues on a hypothetical 1-ha tract of tropical forestland in Cambodia against six land use options to propose measures of compensation. Cambodia’s forests are of high management priority if financial incentives through carbon payment are made available. Using annual equivalent values for each landuse option the authors found that the BAU-timber and REDD+ management options were the most financially and environmentally beneficial. These findings suggest that financial incentives that would allow the continuation of sustainable logging while protecting forest carbon stocks should be provided and would be attractive to REDD+ project developers. — Abby Cheitlin
Sasaki, N., Yoshimoto, A., 2010. Benefits of tropical forest management under the new climate change agreement—a case study in Cambodia, Environmental Science & Policy 13, 384–392.

In order to make new policies under REDD+ attractive for implementation, sustainable forest management in the tropics will be promoted to include sustainable timber production and other ecosystem services. Financial incentives that would be made available under REDD+ policies must be comparable to incentives from other land use options. In Cambodia, forested lands are granted as land concessions for industrial plantations without proper long-term financial assessment from each land use option.
Nophea Sasaki and colleagues in Japan conducted a study in which they analyzed forest inventory data and estimated net present value (NPV) and annual equivalent value (AEV) from timber harvesting and compared them with values from other land uses. AEV was used so that potential revenues could be compared on a yearly basis. This is an important tool for measuring investment performance in land use projects. Using their results, the researchers suggested policy directions for implementing REDD+ projects. A hypothetical 1-ha of forest land in Cambodia was assessed against six landuse options: business-as-usual timber harvesting (BAU-timber), forest management under the REDD+ mechanism, forest-to-teak plantation, forest-to-acacia plantation, forest-to-rubber plantation, and forest-to-oil palm plantation. Sasaki et al. found that the total benefit from logging under BAU-timber would be $2173 ha-1 year-1, logging under REDD+ would be $2400 ha-1 year-1, forest-to-teak would be $958 ha-1 year-1, forest-to-acacia would be $688 ha-1 year-1, forest-to-rubber would be $1200 ha-1 year-1, and forest-to-oil palm would be $747 ha-1 year-1. Forest-to-acacia is not profitable at all because the mean annual growth increment for acacia is low in Cambodia. Converting natural forests to oil palm plantations is not profitable as the total annual revenue for oil palm is $852 ha-1 year-1, which would result in a total loss of AEV’s. Ultimately the economic return for managing natural forests is influenced by costs and timber and carbon prices. Under BAU timber, logging companies see a loss because of the market price of timber; however, government revenues are positive because taxes are based on the amount of timber harvested. Under REDD+ management the economic return is higher than for other land use options in Cambodia. This difference in economic return depends on carbon prices and therefore may fluctuate. Reducing emissions while helping developing countries achieve sustainable development is very important for implementing new climate change mechanisms such as REDD+.

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