Feasibility of sustaining the upland conversion program by establishing a domestic carbon market

Issue Date

12-2008

Abstract

To sustain the upland conversion program (UCP) in China after the government compensation expires, we suggest an establishment of a domestic carbon market where forest carbon from the UCP can be traded. Taking southwest China's Yunnan Province as an example, we explored the feasibility of switching the UCP to a carbon offset project. The breakeven carbon price which is equivalent to the opportunity cost of agricultural cultivation was estimated and then compared with the carbon price in the international market. We found that it is feasible to change the UCP to a carbon offset project if the duration is longer than 10 years at a discount rate of 7%, and if the recent bid price (147.2 Yuan·t-1) for Chinese carbon offset project prevails. The feasibility is better for converted land with lower productivity when the project duration is given. For a given site index, the feasibility is lower as project length is reduced. The results of sensitivity analysis show that the feasibility will be enhanced as the discount rate increases; however, the changes in the price of agricultural products and the amount of sequestered carbon have insignificant effects on the choice of sites and project duration.

Source or Periodical Title

Forestry Studies in China

ISSN

10081321

Volume

10

Issue

4

Page

205-211

Document Type

Article

College

College of Forestry and Natural Resources (CFNR)

Language

English

Subject

Carbon sequestration, Domestic carbon market, Upland conversion program

Identifier

https://doi.org/10.1007/s11632-008-0042-6

Digital Copy

YES

Link to Full Text

Share

COinS