Essays on reducing emissions from deforestation and forest degradation in the Terai Arc landscape of Nepal

Abstract

Opportunity costs of conserving forest for the purpose of greenhouse gas emissions reductions underpin economic sustainability of ‘reducing emissions from deforestation and forest degradation (REDD+)’ and are essential to ascertain before embarking into this newly proposed mechanism to mitigate climate change. Two major determinants of REDD+ opportunity costs are the drivers of deforestation and forest degradation and the carbon stock. These factors differ from place to place. Use of global land use models and of forest carbon stock estimates to design REDD+ at sub-national or national scale may be misleading if they do not reflect local socio-economic and agro-ecological conditions. This study examined the potential costs of emissions reductions in the Terai Arc Landscape of Nepal, one of the biodiversity hotspots of the world. The first part of the thesis examines the underlying causes of deforestation and forest degradation. A sythesized econometric model of deforestation is prepared including rarely integrated part of forest degradation. A newly assembled panel data sets of 15 districts of Nepal over a 19-year period were used for the analysis. The results highlight that increased agricultural yield and promotion of community-based forest management regimes reduce deforestation. Fuel wood, the main source of energy used for cooking in the landscape, is the proximate cause of forest degradation along with timber extraction. Alternative energy sources like solar and biogas can be substituted for fuel wood to reduce forest degradation. The second part of the study deals with carbon stock in the forests. The research estimated the distribution of C stock across the different pools and management regimes of tropical Sal forest. It applied a field measurement approach and collected biomass data from 113 sample plots. The estimated average total carbon stock was 228.76±19.61 Mg ha⁻¹. The value of total C stock, however, varied according to management regimes. The estimated carbon stocks differed from all earlier estimates based on biome-average dataset. Evidence of strong association of C stock with management regime provides valuable information for policy makers to make informed choice of management regime for the landscape. The third part of the study is focused on estimation of opportunity costs of emissions reductions through avoided deforestation and forest degradation. A bottom-up approach is applied using time series data of agriculture, timber and fuel wood production and prices to estimate the opportunity costs. The estimated mean opportunity cost of emissions reductions from avoided deforestation on the Terai Arc Landscape is found to be US$ 8.95 per Mg CO₂e. The study reveals that emission reduction from avoided forest degradation is cheaper than emission reduction through avoided deforestation. The opportunity cost estimates are higher than those reported in earlier global studies and are attributed to higher agricultural returns and lower carbon density in the forest of the Terai Arc Landscape. The study suggests that the levels of funding needed for REDD+ based on the earlier global estimates may be insufficient for effective emissions reductions. Policy makers to be cautious when using global models and values to design any sub-national REDD+ scheme.