Analysis of the Carbon Sequestration Costs of Afforestation and Reforestation Agroforestry Practices and the Use of Cost Curves to Evaluate their Potential for Implementation of Climate Change Mitigation

background

This article analyzes the carbon sequestration costs of agroforestry afforestation/reforestation projects (ARPs) as part of the UN's Clean Development Mechanism by evaluating both economies of scale and opportunity costs that affect total sequestration costs. The study uses an agroforestry project called Scolel Té in Chiapas, Mexico to calculate the average net present value (ANPV) of the project in terms of carbon price and project area.

research goals & methods

The study conducted a break-even analysis for ARPs using data from Scolel Té, and then developed seven cost curves for different sequestration options. Opportunity costs of using the land were also taken into consideration. The sequestration costs follow a U shaped distribution: cost per ton of carbon decreases as land size increases, but after a certain number of hectares (between 10,000-100,000 Ha), the opportunity cost becomes too great and cost per ton of carbon begins to increase again. 

conclusion & takeaways

By analyzing the cost of carbon sequestration, this study contributes to the understanding of carbon pricing. The study asserts that both economies of scale and opportunity costs must be taken into account when pricing carbon sequestration. The study suggests that agroforestry practices that do not require full land conversion (such as living fences or shade-grown coffee) may be effective forms of ARPs, and that payments in the early years of projects may encourage rural people to voluntarily engage in projects.