Afforestation Generated Kyoto Compliant Carbon Offsets: A Case Study in Northeastern Ontario

Jeff Biggs

No 2004-14, Working Papers from University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group

Abstract: With the first commitment period beginning in 2008, resource managers are starting to consider the various management options available to them under the Kyoto Protocol. Though many papers discuss the potential for generating carbon offsets through afforestation at national, provincial and regional scales, none examine the factors critical to decision makers at the management unit level. This paper uses the best available modelling and economic data and applies it at the scale of the Timmins Management Unit (TMU), concentrating on the quality and availability of carbon budget models, domestic carbon market concerns (including price, leakage and permanence) and the presence of an enabling environment (considering government support, afforestation expertise, willingness among managers and land availability). A modelling exercise is then undertaken using GORCAM-WC1 under several scenarios, with ownership, leading species, investment horizon, site productivity and price as variable. The case study and model demonstrate that under current institutional frameworks and the guidelines of the Kyoto Protocol, afforestation projects with the purpose of generating carbon offsets in the TMU are not viable investments for the first commitment period, though it also shows that such projects will be profitable under certain conditions if constraints are removed and investment is long term. However, if one considers that the TMU is representative of Northeastern Ontario (and much of boreal Canada), the opportunities for Kyoto Protocol compliant afforestation for the generation of carbon offsets will likely be small for much of Canada during the first commitment period.

Keywords: Afforestation; carbon markets; carbon modelling; enabling environment; Kyoto Protocol; Northeastern Ontario; scenario development; Timmins management unit (search for similar items in EconPapers)
JEL-codes: Q23 Q27 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2004
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