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Could payments for forest carbon contribute to improved tropical forest management?
Under the Kyoto Protocol industrialized countries will be able to meet carbon emission reduction commitments by financing forestry projects that sequester carbon in developing countries. While this mechanism would compensate for missing markets inforest environmental services, it could also enable industrialized countries to avoidreducing energy use. This paper assesses whether such projects could contribute toimproved logging practices in the tropics. Results from studies primarily in Asia andLatin America are analyzed in the context of the modalities of the Kyoto Protocol.Results show that the opportunity cost of shifting from conventional logging to improvedpractices may have been underestimated. At the same time the long-term carbon andbiodiversity benefits of improved forest management may have been underestimated.These results follow primarily from the fact that most previous studies assume that apermanent forest estate is maintained under conventional logging and that cuttingcycles are as long as 30–60 years. A more realistic scenario, however, consists ofrepeated harvesting at short intervals during the first few decades, resulting in thedegradation of the forest into shrub and grassland. The implications of these results arethat forest management projects may be less cost-effective than previously assumed.Therefore, expectations about their potential contribution to improved managementshould be scaled down. At the same time, the extent to which such projects will enableindustrialized countries to avoid reducing industrial pollution is also unlikely to besignificant. Cost-effectiveness is likely to be highest where timber volumes in the firstfew decades after initial logging are comparable under conventional and improvedlogging. This is likely where topography is relatively flat, biodiversity values are low,wastage of felled timber is high and the policy environment is favorable. A number ofproactive measures are suggested to expand the niche for forest management carbonprojects. These measures are justified because the incremental carbon and biodiversitybenefits in the long run may be higher than previous studies have indicated.