Guthiga Redd Proposal Ef D China


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Guthiga Redd Proposal Ef D China

  1. 1. Ex-ante economic analysis of Kenya's participation in the proposed reduced emissions from avoided deforestation (Redd) climate mitigation scheme Paul Guthiga EfD-Kenya/KIPPRA
  2. 2. Background <ul><li>Tropical deforestation and degradation are important contributors to green house emissions. </li></ul><ul><li>Some studies approximate that about 25% of all carbon dioxide emissions arise from deforestation and degradation (Houghton, 2005) </li></ul><ul><li>Global climate policy initiatives are proposed to compensate tropical forest nations for reducing the emissions of carbon from deforestation and degradation. </li></ul><ul><li>Redd has the potential to to address a substantial share of the world’s emissions which come from deforestation. </li></ul>
  3. 3. Background Cont’d <ul><li>There are plans to include REDD as part of the CDM after expiry of the current Kyoto protocol in 2012. </li></ul><ul><li>The aim is to establish a viable, internationally robust and well funded mechanism to give tropical forest countries economic incentive to slow down the rate of deforestation and degradation. </li></ul><ul><li>Kenya is one of the countries in Africa that will participate in the REDD scheme once it is established. </li></ul><ul><li>To be successful, the country will have to invest in capacity to monitor and report deforestation rates and to slow down deforestation. </li></ul><ul><li>There is currently scanty information on the economic impacts of participating in the proposed REDD. </li></ul>
  4. 4. Research problem <ul><li>Kenya faces a serious problem of deforestation and degradation (approx. 3% of land size). </li></ul><ul><li>To participate in REDD Kenya has to slow down deforestation. </li></ul><ul><li>To benefit from in REDD; it has to invest in carbon monitoring and verification </li></ul><ul><li>Forest carbon is in a sense a new commodity that must be measured to acceptable standards for the commodity to exist. </li></ul><ul><li>Substantial costs will be incurred (both fixed and variable) and these will affect the profitability of climate mitigation schemes. </li></ul><ul><li>Can REDD enable Kenya reverse the alarming rates of deforestation that have been observed in the past? </li></ul><ul><li>Given the investments that Kenya would have to make to fully participate in the REDD program, would it be economically viable to participate? </li></ul>
  5. 5. Research Questions <ul><li>What level of enforcement or incentives will be required to achieve the desired level of reduced deforestation? </li></ul><ul><li>What level of carbon price will lead to optimal level of reduced deforestation? </li></ul><ul><li>What are the likely economic impacts of reducing deforestation in the wider economy especially through the timber industry, energy (fuelwood) e.t.c.? </li></ul><ul><li>By answering these questions the study will highlight the effectiveness, efficiency, risk and uncertainty, sustainability and the effects of REDD as a potential climate mitigation strategy. </li></ul>
  6. 6. Objectives <ul><li>The overall objective is to a carry out a comprehensive economic analysis of Kenya's potential participation in the REDD scheme. </li></ul><ul><li>Specific objectives; </li></ul><ul><ul><li>To identify, quantify and analyse different categories of economic impacts that are likely to arise from participation in the REDD scheme. </li></ul></ul><ul><ul><li>To analyse analyse different potential options for reducing deforestation under the REDD scheme. </li></ul></ul>
  7. 7. Data <ul><li>Rates of deforestation (past and present) </li></ul><ul><li>Costs of REDD (opportunity costs, enforcement costs e.t.c.) </li></ul><ul><li>Benefits of REDD (carbon credits) </li></ul><ul><li>Impacts on demand & supply of timber and non-timber products </li></ul>
  8. 8. Methods <ul><li>Cost-benefit analysis (?) </li></ul><ul><li>Partial equilibrium analysis (?) </li></ul>
  9. 9. Expected Outputs <ul><ul><li>The results of the study will shed light on areas that the government might need to intervene to make Kenya competetive in the emerging carbon markets. </li></ul></ul><ul><ul><li>For international audience with interest in climate mitigation, it will inform debates on the economic implications of REDD on tropical countries. </li></ul></ul>
  10. 10. Potential collaboration <ul><li>OPEN </li></ul>