A bioeconomic analysis of carbon sequestration in farm forestry: a simulation study of 'Gliricidia sepium'

Abstract

Trees provide many environmental services including improved soil fertility and soil structure, which often leads to increased productivity and sustainability of the land. Trees also increase the average carbon stocks of land-use systems. Under the Clean Development Mechanism of the Kyoto Protocol, landholders may receive payments for the carbon-sequestration services provided. This study is the first of a series aimed at assessing the appropriateness of tree-based land-use systems as alternatives to continuous cropping and/or 'Imperata'-fallow systems. The performance of a 'Gliricidia sepium' woodlot, grown over 25 years and under various pruning and harvesting regimes, was assessed through modelling. The assessment was based on the system’s ability to sequester and store carbon, maintain land productivity, and be financially profitable for landholders. It was found that the system was profitable under most management regimes tested. Profits were maximised by pruning and harvesting as much biomass as possible when no carbon payments were available, but this strategy decreased system productivity and profitability in the long run. Carbon-sequestration payments encouraged landholders to adopt less intensive practices since net revenues were higher with carbon payments. It was also shown that the carbon pools included in a carbon-trading scheme were sensitive to carbon-measuring costs. For example, if the annual cost of measuring soil carbon was greater than US$1.19 ha−1 it would not be economical to account for this pool in a carbon-sequestration project.