0615-B2

Economic Worth of Carbon stored in above ground Biomass of Indian Forests.

Ajay Kumar Lal ¹

Abstract

One of the important ecological roles played by forests and one that currently provides the greatest potential to realize an economic return is carbon sequestration. The economic worth of carbon stored in the aboveground biomass of the forests is evaluated by equating it to the cost that would be incurred in offsetting by alternative projects, the carbon dioxide released if the forestlands were converted into alternate land use. A monetary value required to offset the additional carbon stores in the forests as compared to other land uses such as pasture of cropland is calculated. This monetary value is then converted into annual flows. The average cost (dollars/tonnes CO₂ of various other mitigation options is used to calculate the cost required to offset the CO₂ released by forestland conversion. The monetary value obtained is converted into annual flows by discounting it at market interest rate of 10%. This gives the worth of additional aboveground carbon stored in the forestland on annual basis. These calculations have been summarised.

Introduction

Forests provide a vast range of values alongside wood and non-wood products. The values provided by the forests include a wide range of ecological, social and cultural values. These values whether direct use or indirect use of existence or optional need to be expressed in common units of money. In order to achieve this, all components of the values must be expressed separately, computed separately and evaluated separately so that their sum total would result in Total Economic Evaluation (TEV) of these forests.

Failure to account for the numerous functions and economic uses of forests has lead to the patterns of global forests use with many detrimental environmental consequences. Divestment of forests capital and land transfers to support development in other sectors is easy due to extreme under valuation of forestlands. Values of forests should be fully understood so that public becomes aware of the need to be involved and participate in the conservation and the development of the forests for enhancing their socio-economic benefits.

One of the important ecological roles of the forests, and one that currently provides the greatest potential to realize an economic return is carbon sequestration. Carbon sequestration is the long-term storage of carbon or carbon dioxide in the forests, soils, oceans or underground in depleted oil and gas reservoirs, coal seams and saline aquifers. Globally, forests play a major role in the carbon cycle because they account for a greater part of the carbon exchange between the atmosphere and terrestrial biosphere than any other ecosystem type. The forests play an important role both as carbon sink or as carbon source. Forest act as carbon dioxide from the atmosphere through photosynthesis. The carbon is stored in the foliage, stem root systems and most important, the woody tissue in the main stems of the trees. Because of the long time span of most of the trees and relatively large sizes, trees and forests are storehouses of carbon. On the other hand, forests act as carbon source when the trees die or harvested. Some of the carbon released becomes the part of the organic matter component of the forest where depending on the climatic conditions, it can remain for long periods. The reminder is released into the atmosphere, largely as carbon dioxide. A sudden disturbance, such as a wildfire or cleaning or burning of forests for agriculture and settlement by humans, also causes a rapid release of large volumes of carbon dioxide into the atmosphere.

Materials and Methods

The methodology used in this paper to evaluate the economic worth of carbon stored in the aboveground biomass of the forests is that of Replacement Cost (RC). In the RC methodology' the value of an environmental service is evaluated by cost required to restore the environment to the original state by a `shadow' or `compensating' projects after it has been damaged.

The economic worth of carbon stored in the aboveground biomass of the forests is evaluated by equating it to the cost that would be incurred in offsetting by alternative projects, the carbon dioxide released if the forestlands were converted into alternate land use. In other words, a monetary value required to offset the additional carbon stored in the forests as compared to other land uses such as pasture or cropland is calculated. This monetary value is then converted into annual flows.

First, the volume of growing stock recorded for the year 1996 (column 3, Table IV) is multiplied by an Expansion Ratio (ER) to obtain total volume of aboveground biomass. ER is applied to account for the non-commercial biomass (bushes, small trees, etc.), which is not accounted for during volume estimation. ER determined on the basis of earlier studies in India have been used which is summarized in Table I. ER of 1.57 for conifers, 1.59 for broad leaved species and 1.58 for hardwood mixed with conifers as they contain a mix of broad leaved and conifers as they contain a mix of broad leaved and conifer species have been taken (Table-I). ER for bamboos is taken as 1.08 by taking the average values of Oxytenanthera albociliata (wet zone bamboo) and Dendrocalamus strictus (dry zone bamboo).

Table - I Expansion Ratio (ER) for different types of Forests

Next, the volume of aboveground biomass is converted into mass of dry matter by multiplying it by conversion factor 0.5 for mixed forests, and by specific gravity of dry wood in case of pure forests (column 6, Table IV). Then density of aboveground biomass on the forestland (ABGMB _forest) is calculated by dividing aboveground biomass of the forest strata by its respective area (column 7, Table IV).

Next, the alternate land use considered to calculate additional carbon stored in forests is that of agriculture (cropland) or pasture. The aboveground biomass density of pasture or cropland (ABGMB _crop) is taken as 10 dm/ha. The loss of aboveground biomass by conversion of forestland to cropland (column 9, Table IV) is calculated by multiplying the difference (ABGMB _forest - ABGMB _crop) in the biomass densities of forest and cropland by area. The carbon content of the matter is calculated taking into account that the Carbon Fraction (CF) in live biomass is 0.5. The carbon content is liberated. These calculations have been summarized in Table IV.

The average cost (dollars/tonnes CO₂) of various other mitigation options, as summarized in Table II, is used to calculate the cost required to offset the CO₂ released by forestland conversion. The monetary value obtained is converted into annual flows by discounting it at market interest rate of 10%. This gives the worth of additional aboveground carbon stored in the forestland on annual basis. These calculations have been summarized in Table IV.

Table II Cost of various CO₂ (Carbon dioxide) mitigation option for India.

Table III Annual flows of additional aboveground carbon stored in the forestland on annual basis.

TABLE - IV Calculating carbon dioxide liberation from Indian Forests Mt dm: Metric tonnes of dry matter; t dm /ha: tonnes dry matter per hectare

Results and discussion

Accounting for additional aboveground carbon stocks in the forest yields an annual flow of 527.64 US $/ha. The immediate inference from the above estimate is the immense economic and ecological value that the forests provide by storing carbon despite low productivity of Indian forests. If the monetary value of carbon stocks and sinks in the forests is recognised, it can facilitate capital inflows under Clean Development Mechanism (CDM).

Most assessments of forestry potential for mitigating greenhouse effect only consider plantations. However, other options for maintaining and increasing biomass may be much more practical and cost less, often have wide range of benefits and could be more socially and economically acceptable. Reducing deforestation could yield much grater benefits for global climate than expanding plantation silviculture. Regeneration and rehabilitation of degraded land is a low cost, relatively easy to implement and can protect environmentally sensitive areas unsuitable for intensive plantations.

Biomass in Indian Forests is estimated as 93 tonne/ha. as compared to 171 tonne/ha. for Asia Pacific region. If degraded/open forests (forest having < 40% crown density) are suitably rehabilitated, the average growing stock per hectare in Indian forests can be significantly improved and consequently the monetary value calculated above can be significantly augmented. Accordingly to a study by Sathathe and Ravidranath 36.9million ha of degraded forestland with carbon mitigation potential of 74.75 tC/ha is available for regeneration in India with carbon abatement cost in the forestry sector in India can be the basis of attracting Global Environment Facility (GEF) funded projects.

In this paper, attempts have been made to account for change in aboveground carbon stocks only. Further, it is assumed that the biomass harvested as a result of forestland conversion does not result in long-term storage of carbon. The fate of soil carbon, below ground biomass is currently ignored in this calculation, as little information is available in this area for Indian forests. The average rate of diversion (1991-1998) of forestland is just 0.0577 million ha per year. In view of this, and ignoring current increment, the growing stock data for the year of calculation (i.e. 1998) is assumed to be same as that of 1996. Nevertheless, the above factors, if accounted for would increase the economic worth of carbon stored in the forests. In absence of any information on ER for India, the studies available only for some of the species have been used for our analysis. The use of growing stock volume to calculate aboveground biomass has some limitations. Errors include measurement in original volume estimates as minimum diameter of sampled trees is >10 cm use of default values ER, CF and ABGMB crop. A constant ER is assumed for a given forest type/strata, but this is not true in general as ER varies with the age of the trees. An area of future research is to develop reliable estimates of C in all other components of forests at the scale necessary for the analysis at national level.

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¹ Divisional Manager (Planning & Development),HP. State Forest Corporation SDA Complex, Kasumpti,Shimla-171009, Himachal Pradesh. India. Phone Nos.:91-177- 228331 Residence 91-177- 223992 Office Fax:91-177- 221183
e mail: [email protected]