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Open AccessArticle

Opportunity Costs of Carbon Emissions Stemming from Changes in Land Use

by Heli Lu 1,2,3,* and Guifang Liu 1,2
Key Research Institute of Yellow River Civilization and Sustainable Development & Collaborative Innovation Center on Yellow River Civilization of Henan Province, Henan University, Kaifeng 475004, China
Institute of Natural Resources and Environmental Science, Henan University, Kaifeng 475004, China
Institute of Advanced Studies, United Nations University, Yokohama 220-8502, Japan
Author to whom correspondence should be addressed.
Academic Editor: Marc A. Rosen
Sustainability 2015, 7(4), 3665-3682;
Received: 5 December 2014 / Revised: 23 February 2015 / Accepted: 24 March 2015 / Published: 27 March 2015
(This article belongs to the Section Sustainable Use of the Environment and Resources)
The REDD (Reducing Emissions from Deforestation and Forest Degradation) mechanism allows carbon sinks to be used as carbon credits in order to offset emissions from other sources. However, this practice has raised a number of issues relating to financial incentives. In this study, we develop a spatially explicit model for predicting carbon emissions from deforestation that meet baseline levels as well as farmers’ opportunity costs (measured in US dollars per ton of CO2e) under three temporal scenarios with several potential discount rates for agricultural income. Additionally, we use two different accounting methods recommended by the Intergovernmental Panel on Climate Change (IPCC), including the average storage method and the “ton-year approach,” to evaluate emissions reductions. We find that farmers are more likely to prefer REDD in the short-run when discount rates are higher than 10%. However, further analysis indicates that opportunity costs would increase significantly over longer periods of time (middle-term schemes of 35 years or long-term schemes of 55 years), thereby dissuading farmers from choosing REDD. Our findings highlight the drawbacks in using REDD to mitigate global climate change and conserve forests based on farmers’ financial incentives. View Full-Text
Keywords: REDD; carbon emissions; opportunity costs; discount rate REDD; carbon emissions; opportunity costs; discount rate
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Lu, H.; Liu, G. Opportunity Costs of Carbon Emissions Stemming from Changes in Land Use. Sustainability 2015, 7, 3665-3682.

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