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Swallow, B., Van Noordwijk, M., Dewi, S., Murdiyarso, D., White, D., Gockowski, J., Hyman, G., Budidarsono, S., Robiglio, V., Meadu, V., Ekadinata, A., Agus, F., Hairiah, K., Mbile, P. N., Sonwa, D. J., & Weise, S. (2007). Opportunities for avoided deforestation with sus- tainable benefits. An interim report by the ASB partnership for the tropical forest margins. Nairobi: ASB Partnership for the Tropical Forest Margins.

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• TITLE: Opportunity Costs of Emissions Caused by Land-Use Changes

  AUTHORS: S. Suyanto, Andree Ekadinata, Muhammad Sofiyuddin, Arif Rahmanullah

  KEYWORDS: Opportunity Cost; Land Use Change; Carbon Emission; REDDS

  JOURNAL NAME: Open Journal of Forestry, Vol.4 No.1, January 27, 2014

  ABSTRACT: Amid the euphoria of Reducing Emissions from Deforestation and Forest Degradation (REDD) and REDD+ discussions, the expectations of large financial gains raise the interest of all. A country, however, will only enjoy REDD benefits if the cost of REDD is lower than the benefit. The opportunity cost analysis is an effective tool for assessing the feasibility of REDD+ since the largest portion of costs associated with REDD+ and can help to identify fair compensation for those who change their land use. The opportunity cost analysis has been exercised in Tanjung Jabung Barat (Tanjabar) district-Indonesia to examine the economic-feasibility of carbon emission reduction under different type carbon price scenarios. This study reveals a sharp decline of land-use systems with high carbon-stock and low profitability is obvious. On mineral soil, low carbon-stock and high profitability (mostly oil palm) has increased rapidly, especially in the period 2000-2009. It has become the dominant land-use system. The low-to-medium carbon stock and medium profitability land-use category increased from 1990 to 2005 but declined from 2005 to 2009. The low carbon-stock and low profitability category was constant and the proportion of the area was below 15%. The ex-ante analysis in predicting the potential for future emissions reduction in Tanjabar through REDD+ approaches shows that the cumulative emission of Tanjabar in 2020 is estimated at 61.91 Mg CO2-eq/Ha.Year, while the reduced emission by excluding all land use conversion below $5 threshold is estimated at 51.71 Mg CO2-eq/Ha.Year. This means that there is a potential for 16% emission reduction using $5/ton CO2-eq incentive. Another important finding in this study is that if the price of carbon increases by double to $10, the amount of reduced emission does not change much. This can use as a basis for determining the right amount of incentive for trade-off between economic profitability and climate change mitigation effort in Tanjabar using REDD+ scheme both at seller and buyer perspectives.