Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-11-24T06:03:23.192Z Has data issue: false hasContentIssue false
  • English
  • Français

Linking reduced deforestation and a global carbon market: implications for clean energy technology and policy flexibility

Published online by Cambridge University Press:  08 February 2011

VALENTINA BOSETTI ,
RUBEN LUBOWSKI ,
ALEXANDER GOLUB  and
ANIL MARKANDYA
VALENTINA BOSETTI
Affiliation:
Sustainable Development Unit, Fondazione Eni Enrico Mattei (FEEM) and Climate Impacts and Policy Division of the EuroMediterranean Center on Climate Change (CMCC), Fondazione Eni Enrico Mattei, Corso Magenta 63, Milan, Italy. Tel: +39 02 52036916. Fax: +39 02 52036946. Email: [email protected]
RUBEN LUBOWSKI
Affiliation:
Environmental Defense Fund (EDF), 1875 Connecticut Avenue NW, Washington, DC 20009, USA. Email: [email protected]
ALEXANDER GOLUB
Affiliation:
Environmental Defense Fund (EDF), 1875 Connecticut Avenue NW, Washington, DC 20009, USA. Email: [email protected]
ANIL MARKANDYA
Affiliation:
Basque Center for Climate Change (BC3) and University of Bath, Basque Center for Climate Change – Klima Aldaketa Ikergai, Gran Vía 35, 2, Bilbao, Spain. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

This study uses a global climate-energy-economy model to investigate potential implications of linking credits from reducing emissions from deforestation and forest degradation in developing countries to a global carbon market, focusing on reducing emissions from deforestation (RED) and effects on energy technology innovation. Integrating RED into a global carbon market lowers the estimated total costs of a policy to achieve 535 ppmv of CO2-equivalent concentrations in 2100 by up to 25 per cent. Alternatively, a global RED program could enable additional reductions of about 20 ppmv by 2100 with no added costs compared with an energy-sector-only policy. The results indicate that market linkage of RED induces modest reductions in clean energy innovation overall but slightly enhances development of particular technologies, including carbon capture and storage. We also find that RED in combination with credit banking encourages greater mitigation in the near term, enhancing flexibility to potentially tighten emission targets at lower cost in response to future information.

Type
Research Article
Information
Environment and Development Economics , Volume 16 , Special Issue 4: REDUCING EMISSIONS FROM DEFORESTATION AND FOREST DEGRADATION (REDD) , August 2011 , pp. 479 - 505
Copyright
Copyright © Cambridge University Press 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anger, N., Dixon, A., and Livengood, E. (2009), ‘Interactions of reduced deforestation and the carbon market’, ZEW Discussion Paper No. 09-001, Center for European Economic Research, Mannheim, Germany.Google Scholar
Anger, N. and Sathaye, J. (2008), ‘Reducing deforestation and trading emissions: economic implications for the Post-Kyoto market’, ZEW Discussion Paper No. 08-016, Center for European Economic Research, Mannheim, Germany.CrossRefGoogle Scholar
Bosetti, V., Carraro, C., Galeotti, M., Massetti, E., and Tavoni, M. (2006), ‘WITCH: a world induced technical change hybrid model’, The Energy Journal, Special Issue on Hybrid Modeling of Energy-Environment Policies: Reconciling Bottom-up and Top-down: 13–38.CrossRefGoogle Scholar
Bosetti, V., Carraro, C., Duval, R., Sgobbi, A., and Tavoni, M. (2009), ‘The role of R&D and technology diffusion in climate change mitigation: new perspectives using the WITCH model’, OECD Economics Department Working Paper No. 664, OECD Publishing, Paris.CrossRefGoogle Scholar
Boyd, W. (2010), ‘Deforestation and emerging greenhouse gas compliance regimes: toward a global environmental law of forests, carbon, and climate governance’, in Bosetti, V. and Lubowski, R. (eds), Deforestation and Climate Change: Reducing Carbon Emissions from Deforestation and Forest Degradation, Cheltenham: Edward Elgar, pp. 1–15.Google Scholar
Busch, J., Strassburg, B., Cattaneo, A., Lubowski, R., Bruner, A., Rice, R., Creed, A., Ashton, R., and Boltz, F. (2009), ‘Comparing climate and cost impacts of reference levels for reducing emissions from deforestation’, Environmental Research Letters 4: 11.CrossRefGoogle Scholar
Calvin, K., Patel, P., Fawcett, A., Clarke, L., Fisher-Vanden, K., Edmonds, J., Kim, S.H., Sands, R., and Wise, M. (2009), ‘The distribution and magnitude of emissions mitigation costs in climate stabilization under less than perfect international cooperation: SGM results’, Energy Economics 31: S187–S197.CrossRefGoogle Scholar
Commission of the European Communities (EC) (2008), ‘Addressing the challenges of deforestation and forest degradation to tackle climate change and biodiversity loss’, Communication from the commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2008) 645/3, Brussels, Belgium.Google Scholar
Edmonds, J.A., Clarke, J., Dooley, J., Kim, S.H., Izaurralde, R., Rosenberg, N., and Stokes, G. (2003), ‘The potential role of biotechnology in addressing the long-term problem of climate change in the context of global energy and ecosystems’, in Gale, J. and Kaya, Y. (eds), Greenhouse Gas Control Technologies, Amsterdam: Pergamon, pp. 1427–1432.CrossRefGoogle Scholar
Eliasch, J. (2008), Climate Change: Financing Global Forests, UK: Office of Climate Change.Google Scholar
Energy Information Administration (EIA) (2008), International Energy Outlook 2007, DOE/EIA-0484, Washington, DC: US Department of Energy.Google Scholar
Fisher, B., Nakicenovic, N., Alfsen, K., Morlot, J.C., de la Chesnaye, F., Hourcade, J.-C., Jiang, K., Kainuma, M., La Rovere, E., Matysek, A., Rana, A., Riahi, K., Richels, R., Rose, S., Van Vuuren, D., and Warren, R. (2007), ‘Issues related to mitigation in the long term context’ (Chapter 3), in Metz, B., Davidson, O.R., Bosch, P.R., Dave, R., and Meyer, L.A. (eds), Climate Change 2007: Mitigation of Climate Change, Contribution of Working Group III to the Fourth Assessment Report of the Inter-governmental Panel on Climate Change, Cambridge: Cambridge University Press, pp. 170–250.Google Scholar
Fuss, S., Szolgayovat, J., Golub, A., and Obersteiner, M. (2011), ‘Options on low-cost abatement and investment in the energy sector: new perspectives on REDD’, Environment and Development Economics, forthcoming.CrossRefGoogle Scholar
Golub, A. (2010), ‘Options on REDD as a hedging tool for post-Kyoto climate policy’, in Bosetti, V. and Lubowski, R. (eds), Deforestation and Climate Change: Reducing Carbon Emissions from Deforestation and Forest Degradation, Cheltenham: Edward Elgar, pp. 165–176.Google Scholar
Golub, A., Hertel, T., Lee, H.-L., Rose, S., and Sohngen, B. (2009), ‘The opportunity cost of land use and the global potential for greenhouse gas mitigation in agriculture and forestry’, Resource and Energy Economics 31: 299–319.CrossRefGoogle Scholar
Gusti, M., Havlik, P., and Obersteiner, M. (2008), ‘Technical description of the IIASA model cluster’ [Online], International Institute for Applied Systems Analysis (IIASA), Laxenberg, posted online August 2008 at http://tna.europarchive.org/20081112122150/ http://www.occ.gov.uk/activities/eliasch/Gusti_IIASA_model_cluster.pdf (Accessed on 16 December 2010).Google Scholar
Hansen, M., Stehman, S., Potapov, P., Loveland, T., Townshend, T., DeFries, R., Pittman, K., Arunarwati, B., Stolle, F., Steininger, M., Carroll, M., and DiMiceli, C. (2008), ‘Humid tropical forest clearing from 2000 to 2005 quantified by using multitemporal and multiresolution remotely sensed data’, Proceedings of the National Academy of Sciences 105 (27): 9439–9444.CrossRefGoogle ScholarPubMed
Hertel, T., Rose, S., and Tol, R. (2009), ‘Land use in computable general equilibrium models: an overview’ (Chapter 1), in Hertel, T., Rose, S., and Tol, R. (eds), Economic Analysis of Land Use in Global Climate Change Policy, New York: Routledge, pp. 3–30.CrossRefGoogle Scholar
Intergovernmental Panel on Climate Change (IPCC) (2001), Climate Change 2001: The Scientific Basis, Contribution of Working Group I to the Third Assessment Report of the Intergovernmental Panel on Climate Change, Houghton, J.T., Ding, Y., Griggs, D.J., Noguer, M., van der Linden, P.J., Dai, X., Maskell, K., and Johnson, C.A. (eds), Cambridge: Cambridge University Press, pp. 1–881.Google Scholar
Intergovernmental Panel on Climate Change (IPCC) (2007a), Climate Change 2007: Impacts, Adaptation and Vulnerability, Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Parry, M.L., Canziani, O.F., Palutikof, J.P., van der Linden, P.J., and Hanson, C.E. (eds), Cambridge: Cambridge University Press, pp. 1–881.Google Scholar
Intergovernmental Panel on Climate Change (IPCC) (2007b), Climate Change 2007: Mitigation of Climate Change, Contribution of Working Group III to the Fourth Assessment Report of the Inter-governmental Panel on Climate Change, Metz, B., Davidson, O.R., Bosch, P.R., Dave, R., and Meyer, L.A. (eds), Cambridge: Cambridge University Press, pp. 1–881.Google Scholar
International Energy Agency (IEA) (2007), World Energy Outlook 2007, Paris: OECD/IEA.Google Scholar
Kaya, Y. and Yokobori, K. (1997), Environment, Energy, and Economy: Strategies for Sustainability, New York: United Nations University Press.Google Scholar
Kindermann, G., Obersteiner, M., Sohngen, B., Sathaye, J., Andrasko, K., Rametsteiner, E., Schlamadinger, B., Wunder, S., and Beach, R. (2008), ‘Global cost estimates of reducing carbon emissions through avoided deforestation’, Proceedings of the National Academy of Sciences 105 (30): 10302–10307.CrossRefGoogle ScholarPubMed
Meinshausen, M., Raper, S.C.B., and Wigley, T.M.L. (2008), ‘Emulating IPCC AR4 atmosphere-ocean and carbon cycle models for projecting global-mean, hemispheric and land/ocean temperatures: MAGICC 6.0’, Atmospheric Chemistry and Physics Discussions 8: 6153–6272.Google Scholar
Melillo, J., Reilly, J.M., Kicklighter, D.W., Gurgel, A.C., Cronin, T.W., Paltsev, S., Felzer, B.S., Wang, X., Sokolov, A.P., and Schlosser, C.A. (2009), ‘Indirect emissions from biofuels: how important?’, Science 326 (5958): 1397–1399.CrossRefGoogle ScholarPubMed
Murray, B.C., Lubowski, R., and Sohngen, B. (2009), ‘Including international forest carbon incentives in climate policy: understanding the economics’, Nicholas Institute Report NI R 09-03, Nicholas Institute for Environmental Policy Solutions, Duke University, Durham, NC.Google Scholar
Nepstad, D., Soares-Filho, B., Merry, F., Moutinho, P., Oliveira Rodrigues, H., Bowman, M., Schwartzman, S., Almeida, O., and Rivero, S. (2007), ‘The costs and benefits of reducing deforestation in the Brazilian Amazon’, Woods Hole, MA: Woods Hole Research Center.Google Scholar
Nepstad, D., Soares-Filho, B.S., Merry, F., Lima, A., Moutinho, P., Carter, J., Bowman, M., Cattaneo, A., Rodrigues, H., Schwartzman, S., McGrath, D.G., Stickler, C.M., Lubowski, R., Piris-Cabezas, P., Rivero, S., Alencar, A., Almeida, O., and Stella, O. (2009), ‘The end of deforestation in the Brazilian Amazon’, Science 326: 1350–1351.CrossRefGoogle ScholarPubMed
Paltsev, S., Reilly, J.M., Jacoby, H.D., Gurgel, A., Metcalf, G.E., Sokolov, A.P., and Holak, J.F. (2007), ‘Assessments of US cap-and-trade proposals’, MIT Joint Program on the Science and Policy of Global Change Report No. 146, Massachusetts Institute of Technology, Cambridge, MA.CrossRefGoogle Scholar
Parker, C., Mitchell, A., Trivedi, M., and Mardas, N. (2008), The Little REDD Book: A Guide to Governmental and Non-Governmental Proposals for Reducing Emissions from Deforestation and Degradation, Oxford: Global Canopy Programme.Google Scholar
Parker, C., Brown, J., Pickering, J., Roynestad, E., Mardas, N., and Mitchell, A.W. (2009), The Little Climate Finance Book: A Guide to Financing Options for Forests and Climate Change, Oxford: Global Canopy Programme.Google Scholar
Piris-Cabezas, P. (2010a), ‘The European Union's position on REDD financing’, in Bosetti, V. and Lubowski, R. (eds), Deforestation and Climate Change: Reducing Carbon Emissions from Deforestation and Forest Degradation, Cheltenham: Edward Elgar, pp. 39–51.Google Scholar
Piris-Cabezas, P. (2010b), ‘REDD and the global carbon market: the role of banking’, in Bosetti, V. and Lubowski, R. (eds), Deforestation and Climate Change: Reducing Carbon Emissions from Deforestation and Forest Degradation, Cheltenham: Edward Elgar, pp. 151–164.Google Scholar
Piris-Cabezas, P. and Keohane, N. (2008), ‘Reducing emissions from deforestation and forest degradation: implications for the carbon market’, Environmental Defense Fund, Washington, DC, available online at http://www.edf.org/documents/7975_REDDandCarbonMarketAnalysisReport_EDF_0508.pdfGoogle Scholar
Ronneberger, K., Berrittella, M., Bosello, F., and Tol, R.S.J. (2009), ‘KLUM@GTAP: spatially explicit biophysical land use in a computable general equilibrium model’ (Chapter 12), in Hertel, T., Rose, S., and Tol, R. (eds), Economic Analysis of Land Use in Global Climate Change Policy, New York: Routledge, pp. 304–338.Google Scholar
Rose, S.K. and Sohngen, B. (2011), ‘Global forest carbon sequestration and climate policy design’, Environment and Development Economics, forthcoming.CrossRefGoogle Scholar
Rose, S.K., Ahammad, H., Eickhout, B., Fisher, B., Kurosawa, A., Rao, S., Riahi, K., and van Vuuren, D. (2011), ‘Land in climate stabilization modeling: initial observations’, Energy Economics, forthcoming.Google Scholar
Soares-Filho, B.S., Nepstad, D.C., Curran, L.M., Cerqueira, G.C., Garcia, R.A., Ramos, C.A., Voll, E., McDonald, A., Lefebvre, P., and Schlesinger, P. (2006), ‘Modelling conservation in the Amazon basin’, Nature 440 (7083): 520–523.CrossRefGoogle ScholarPubMed
Sohngen, B. and Mendelsohn, R. (2003), ‘An optimal control model of forest carbon sequestration’, American Journal of Agricultural Economics 85 (2): 448–457.CrossRefGoogle Scholar
Sohngen, B. and Sedjo, R. (2006), ‘Carbon sequestration in global forests under different carbon price regimes’, Energy Journal 27: 109–126.CrossRefGoogle Scholar
Stern, N. (2007), The Economics of Climate Change: The Stern Review, Cambridge: Cambridge University Press.CrossRefGoogle ScholarPubMed
Tavoni, M., Sohngen, B., and Bosetti, V. (2007), ‘Forestry and the carbon market response to stabilise climate’, Energy Policy 35 (11): 5346–5353.CrossRefGoogle Scholar
United Nations Framework Convention on Climate Change (UNFCCC) (2010), ‘Outcome of the work of the ad hoc working group on long-term cooperative action under the convention’, Draft decision -/CP.16, available online at http://unfccc.int/files/meetings/cop_16/application/pdf/cop16_lca.pdf.Google Scholar
US Climate Action Partnership (USCAP) (2009), ‘Key findings from the economic analysis of the USCAP Blueprint for Legislative Action’, United States Climate Action Partnership, Washington, DC.Google Scholar
US Environmental Protection Agency (EPA) (2006), ‘Global mitigation of non-CO2 greenhouse gases’, Report No. 430-R-06-005, EPA Office of Atmospheric Programs, Washington, DC.Google Scholar
US Environmental Protection Agency (EPA) (2009), ‘EPA analysis of the American Clean Energy and Security Act of 2009 H.R. 2454 in the 111th Congress’, EPA Office of Atmospheric Programs, Washington, DC.Google Scholar
Wise, M., Calvin, K., Thomson, A., Clarke, L., Bond-Lamberty, B., Sands, R., Smith, S.J., Janetos, A., and Edmonds, J. (2009), ‘Implications of limiting CO2 concentrations for land use and energy’, Science 324: 1183–1186.CrossRefGoogle ScholarPubMed
Supplementary material: PDF

Bosetti Supplementary Material

Bosetti Supplementary Appendix

Download Bosetti Supplementary Material(PDF)
PDF 267.6 KB