Abstract ▼

The Kyoto Protocol and the Marrakech Accords to the United Nations Framework Convention on Climate Change (UNFCCC) recognize Land Use, Land-Use Change, and Forestry (LULUCF) activities as a potential means to reduce greenhouse gases (GHGs) in the atmosphere. In recent years, LULUCF activity has rece

The Kyoto Protocol and the Marrakech Accords to the United Nations Framework Convention on Climate Change (UNFCCC) recognize Land Use, Land-Use Change, and Forestry (LULUCF) activities as a potential means to reduce greenhouse gases (GHGs) in the atmosphere. In recent years, LULUCF activity has received a great deal of attention internationally, and many researches have been conducted in this area.

Among the related research efforts, some economists have taken economic approaches to analyze the carbon sequestration policy. There are three different categories of economic studies for carbon sequestration: bottom-up engineering cost studies, sectoral optimization studies that account for behavioral responses in the forest and agricultural sectors, and econometric studies of the revealed preferences of landowners (Richard and Stoke, 2004).

Despite the increasing attention toward carbon-sink management under the climate change negotiation process and research arena, little consideration is given to carbon sequestration in Korea. The major efforts so far have been concentrated on the construction of necessary statistics on GHGs emissions and removals by LULUCF activities for National Communication under the Convention. In particular, the carbon sequestration through afforestation program as a mitigation policy has been largely ignored in establishing the national strategies to reduce GHGs in Korea. This may be due to the fact that the energy sector is a major contributor to GHG emissions, and, thus, the mitigation policy has centered on the energy sector. Another reason could be the fact that the competition among land uses has been substantially high in Korea, and, therefore, the large-scale afforestation is often not feasible.

Lately, however, the circumstances are being changing. Due to the significant increase in agricultural productivity and other factors, the area of marginal and/or idle cropland has continuously increased. In 2001, about 206,000 hectare of marginal cropland is estimated nationwide, which corresponds to 11% of total cropland (Ministry of Agriculture and Forestry, 2001). The increasing trend of marginal cropland is anticipated to continue, and the preparation of appropriate policy in response becomes an urgent issue. Furthermore, although development pressures on agricultural and forestland still exist, they are relatively low compared to the past due to stabilized population growth. Lastly, the public is becoming more interested in the various environmental services provided by forest including clean air, clean water, carbon sequestration, and recreation etc. In particular, the demand for forest-based recreational activity is notably increasing in Korea lately due to the increase of leisure time.

With these changing circumstances, the carbon sequestration program as an alternative policy to reduce CO₂ in the atmosphere becomes more attractive to decision-makers. However, the carbon sequestration program to be a practical policy in Korea, the feasibility and cost-effectiveness of the program should be examined compared to other CO₂ mitigation strategies beforehand.

The purpose of this study is to use an econometric land use model to estimate the costs of carbon sequestration programs in Korea. In the literature, most of the economic studies of carbon-sink management evaluate government policies that are designed to encourage the conversion of agricultural and/or marginal land to forest. A similar approach is employed in this study. Econometric land use model is capable of depicting the behavioral aspects of land-use choices based on the revealed preferences of landowners and hence yields more accurate estimates of costs of carbon sequestration. The specific objectives of the study are:
▷ to give an overview of the negotiation process of Kyoto Protocol in relation to LULUCF and provide GHGs inventory in Korea with reference to National Communication under the Convention.
▷ to describe the aggregated econometric land use share model and to estimate the model with panel data.
▷ to design the carbon sequestration programs and operating scenarios and simulate carbon sequestration costs based on the parameter estimates from the econometric land use model given the scenarios.
▷ to provide policy implications of the simulation results on the costs of carbon sequestration in Korea.

The basic framework of carbon sequestration program adopted in this application is to pay landowners to retire their land for a period of time. Land is supposed to enroll for a ten-year period of time, and landowners are required to convert their land to forest. After ten years, landowners decide whether they continue to enroll their land or leave the program. Our program begins in 2003 and operates for eighty years. Only marginal or idle cropland is eligible for the program. Landowners enroll their land at the start of each decade and receive fixed annual payments plus the cost of establishing trees at the beginning of the period. The ten-year stream of payments increases the rents received from forestland, and landowners allocate more land to forest. The payments to the landowner represent the opportunity cost of enrollment. The basis of forestland area projection associated with the payment level is the parameter estimates of econometric land use share model. For a range of payments, we simulate increases in forest area and calculate the total carbon sequestration costs as the present value of establishment costs and payments over the eighty-year program period.

With the basic frame of the program described above, we consider four scenarios in order to examine the various assumptions on the features of carbon sequestration programs. Scenario 1 assumes that Larix leptolepis is established on the enrolled agricultural land, and the plantation stands permanently without harvest. Scenario 2 duplicates scenario 1 except that stands are harvested at the rotation age, and the same species is replanted after harvest. Scenario 3 replicates scenario 1 except Pinus koraiensis is planted. Scenario 4 simulates the effects of mixture of Larix leptolepis and Pinus koraiensis. Scenario 1 and 2 are designed to compare the effects of harvest on the carbon sequestration. Scenarios 1, 3, and 4 are designed to examine the differences in capability of carbon sequestration resulting from establishing different tree species. Larix leptolepis and Pinus koraiensis are selected because they are most widely planted species in Korea lately.

The cost of carbon sequestration of this study is represented as the unit costper ton of carbon stored and is calculated as:
Unit Cost =(수식)
,where t is the program time horizon, r is a social discount rate, and “won(\)” is Korean currency.

To compute the “won(\)/ha” in the numerator of the equation above, we first estimate a standard land use share model, which explains the landowner’s problem of allocating a fixed amount of land to competing uses given the profit maximization with panel data (refer to chapter 3 for the details). Next, for a range of payment levels, we project the effects of forest subsidies on forestland area by increasing the forest rents given the parameter estimates of the land use model (refer to the section 3 of chapter 4 for the details). Finally, we compute the total costs, which include fixed payments and establishment costs over the course of the simulation period for each payment level and, then, the resulting terms are discounted and divided by the total enrolled land to produce “\/ha” values. To calculate the “ton C/ha” in the denominator in the equation, we discount annual increments in ton C back to present values for each scenario using the same discount rate, and, then sum up over the simulation period (refer to the section 4 of chapter 4 for the details). The required data to compute carbon stored per unit area are mostly obtained from the Korea Forest Research Institute (KFRI).

The resulting unit cost for each payment level is summarized in the Table below. We find that the unit cost (\/ton C) varies from \66,021 to \504,578 depending on the scenarios and payment levels. Scenario 1 provides the least unit cost followed by scenario 2, scenario 4, and scenario 3. Note that there is not much difference in unit cost between scenario 1 and 2 (e.g. \108,483 vs. \109,565 given \100,000 payment level), implying that well managed timberland with harvest can play an important role as a carbon sink as well as a source for timber revenue. This result, however, may be partly due to the fact that Larix leptolepis is an early carbon taker so that the carbon loss from harvest is restored faster than other species. Therefore, a careful interpretation is required. In comparing unit costs by scenario 1 and 3, establishing Larix leptolepis stand is more desirable than planting Pinus koraiensis for the purpose of carbon sequestration in Korea.

When we compare our estimates of unit costs ($/ton C) to other similar studies conducted abroad, our estimates are higher than those in US studies (Plantinga (1999); Stavins (1999)) and on a global scale study (Sohngen and Mendelshon (2001)), yet lower than that in the study of Netherlands (Slangen and van Kooten (1996)). This result is entirely plausible because the competitions among land uses are relatively low in US and high in Europe, respectively, compared to Korea. When we compare our estimates of unit costs to other GHGs mitigation policies in Korea, we find that carbon sequestration can be a cost-effective mitigation option to reduce CO₂ emission, yet not the least-cost option. For example, improvement in feeding for agricultural animal to reduce the methane emission (unit cost is \71,020) is an option that may be cheaper than carbon sequestration to store ton of carbon in Korea according to Ministry of Commerce, Industry, and Energy (1998).

Notice, however, that this comparison considers the cost side of mitigation policy only. Once we incorporate the benefit side of the policy into analysis, the whole story can be changed because the negative unit costs are possible with carbon sequestration program due to the environmental services provided by forests. The benefits of afforestation program, in addition to carbon sequestration, include supplying clean-air and clean-water, protecting soil erosion, providing wildlife habitat and recreation opportunities etc. In fact, the negative unit cost for carbon sequestration program is reported in case of China (Xu, 1995). In this regard, once we include the benefits associated with the program in the analysis, afforestation program becomes a more attractive mitigation policy to decision makers. Future research is warranted for a benefit-cost analysis of carbon sequestration program.

Another finding from this study is that the unit cost measurement can be largely subject to the capability of land in storing carbon per unit area. Because annual payment level is fixed for our simulation, the total cost of implementing carbon sequestration program is not likely to differ significantly unless the land area leaving and entering the program is repeatedly large in scale. This realization draws the attention to an alternative to reduce the unit cost, which is to increase the carbon uptake per hectare (i.e. increase in denominator in the equation). This may have an important policy implication that enhancing forest management leading to increase of carbon stored per unit area is just as important as expanding afforestation.

There are some caveats in interpreting the results of this study and related future research topics to be mentioned. Our unit cost measurements of carbon sequestration programs are subject to uncertainty. The uncertainty mainly originates from the assumptions made in carbon flow computation such as the amount of carbon stored in soils. Although many related researches are recently being conducted, they are still in early stages and it is likely to take some time to accumulate the reliable data. Needless to say, establishing the reliable data on carbon accounting is a pre-requisite for credible studies on the costs of carbon sequestration.

In terms of the econometric land use modeling, it is recognized that the model used in this study is more suited for explaining the overall historical trends of land uses than to describe the spatial heterogeneity across the regions. Because explaining the changes of land uses in spatial context is becoming important, there is a need to improve the model accordingly by, for instance, exploring the fixed and random effect models with the panel data.

(출처 : Abstract 5p)

목차 Contents

• COVER ... 1
• Foreword ... 4
• Abstract ... 5
• Contents ... 11
• List of Tables ... 12
• List of Figures ... 13
• Chapter 1. Introduction ... 14
• Chapter 2. Land Use Change and Greenhouse Gases ... 18
• 1. Kyoto Protocol and Land-Use Change ... 18
• 2. IPCC Guidelines: Land-Use Change Sector ... 19
• 3. Greenhouse Gas Inventory: Land-Use Change Sector ... 22
• 4. Historical Trends of Land Use in Korea ... 26
• Chapter 3. An Econometric Model of Land Use ... 28
• 1. Aggregated Land Use Share Model ... 28
• 2. Data ... 32
• 3. Estimation and Results ... 37
• Chapter 4. Simulation of Carbon Sequestration ... 41
• 1. Simulation Procedure ... 41
• 2. Carbon Sequestration Program Design ... 42
• 3. Land Area Projection ... 43
• 4. Carbon Flow Computation ... 49
• 5. Costs of Carbon Sequestration ... 53
• 6. Comparisons to Other Studies and Policy Implications ... 57
• Chapter 5. Conclusion ... 60
• Reference ... 63
• Abstract in Korean ... 66
• End of Page ... 71