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Please cite
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Fearnside, P.M. 1995.  Global warming response options in Brazil's forest sector: Comparison of project-level
costs and benefits. Biomass and Bioenergy 8(5): 309-322.

ISSN: 0961-9534

Copyright: Elsevier

The original
publication is available at http://elsevier.com.nl

GLOBAL WARMING RESPONSE OPTIONS IN BRAZIL'S FOREST SECTOR:

COMPARISON OF PROJECT-LEVEL COSTS AND BENEFITS

Philip
M. Fearnside

National
Institute for Research

in the Amazon (INPA)

C.P.
478

69011-970 Manaus, Amazonas

BRAZIL

Fax:
55 - 92 - 236-3822

After Nov. 1994: 642-3028

31
Oct. 1994

2
Nov. 1994

4
Nov. 1994

7
Nov. 1994

15
Nov. 1994

ABSTRACT

A
project-level assessment of monetary and carbon costs and benefits for 5 classes
of global warming response options in the forest sector is attempted for
typical Brazilian conditions.
Options considered are: silvicultural plantations (for pulp, charcoal
and sawlogs), sustainable timber management and reduction of deforestation.  Comparison of pulpwood and sawlog
plantations with the vegetation characteristic of deforested areas indicates a
modest carbon benefit.  Plantations
for charcoal can produce a substantial carbon benefit through fossil fuel
substitution, but much of this calculated benefit disappears if discount rates
greater than zero are applied to carbon.
Sustainable timber management, when compared with existing forest,
represents a net carbon loss, accumulation of carbon in wood products being
insufficient to compensate for biomass reduction over a 100-year time
scale.  Reduction of deforestation
has great potential as a global warming response option, its per-hectare carbon
benefits being approximately four times that of silvicultural plantation
establishment for pulp and sawlogs over a 100-year period.  The costs of reducing deforestation are
difficult to assess, however, due to the importance of government policy
changes such as removal of land speculation and land tenure establishment as
motives for clearing.  Although
these changes would not cost money and would have tremendous carbon and other
benefits, they have not yet occurred.

KEY WORDS:  Brazil, Amazon, silviculture, global
warming, deforestation, carbon sequestration, tropical forest, Eucalyptus,
plantations, greenhouse effect

1. TYPES OF COMPARISONS OF FOREST SECTOR
RESPONSE OPTIONS

1.1.
Project- versus program-level analysis

Costs
and benefits of global warming response options can be examined at various
levels, such as the project level and the program level.  Costs and benefits should include not
only the monetary and greenhouse gas (GHG) implications of a response option,
but also consequences such as impacts on the local society and environment.  A project-level analysis limits its
scope to the immediate area of a project, and does not include changes outside
these narrow boundaries, such as macro-economic effects of products produced by
the project, carbon consequences of the output from the project (such as wood
from plantations) substituting for products that would otherwise be coming from
other sources, or impacts of deforestation carried out by people displaced by a
plantation or other project.  These
concerns would be included in a program-level analysis, where scenarios for an
entire region or country are constructed with and without the project, thereby
allowing assessment of overall GHG emissions, economic well-being, etc.

The
present paper limits itself to the project level.  The methods follow those outlined by
Sathaye et al.1 and allow some comparisons among
countries.  The project-level
results are essential inputs to program-level analyses, but cannot by
themselves be expected to provide the information needed to choose among global
warming response options.

1.2.
Discounting carbon

Most
analyses of carbon benefits of response options do not discount carbon (i.e.,
they adopt a discount rate of zero).
This is currently the practice of the Global Environment Facility (GEF)
in comparing options for financing with the funds this agency distributes under
Agenda 21.  However, a zero discount
rate introduces distortions in the relative merit of different options.  Giving some additional weight to the short-term,
as opposed to the long-term, is warranted.
Selfish or not, most people are more concerned with what will occur over
the remainder of their own lives than they are with what will occur a century
in the future.  It is also true that
an emission today sets in motion physical processes (such as warming of oceans)
that have momentums of their own, and which can be expected to provoke impacts
(including increased human mortality rates) from the time that they begin
onwards.  Postponing these increases
in the level of impacts is similar to avoided fossil fuel emissions,
representing a permanent gain if net emissions occur later rather than
sooner.  This makes a discount rate
greater than zero reasonable for carbon.
There is no reason, however, that it should be the same rate as that
used for money.  The decision as to
what discount rate should be used for carbon, or whether an alternative method
of time-preference weighting should be used, is an ethical and moral one that
needs to be taken by society as a whole.

The
length of the time horizon has a strong effect on the importance of discounting.  As time horizons become longer, the
distortions become greater if no discounting is applied.  In the case of forest sector options
that can transfer carbon to very long-term pools, these pools can dominate the
results if very long horizons are considered without discounting.  In the case of an infinite time horizon,
equilibrium conditions will apply.
Slow buildup of carbon in very-slow-turnover classes of wood products
dominates the results at equilibrium, but occurs at such remote times that it
has little bearing on present decisions when discounting is applied.  These problems also apply to
calculations made under the assumption that the shadow price of carbon
increases at the same rate as the discount rate for money, thereby allowing
analysis without discounting carbon.

In
order to avoid these problems, carbon accounting is presented in the present
paper using 3 discount rates for carbon: 0%, 1% and 5%.  As the results to be presented show, the
arguments for adopting a discount rate for carbon greater than zero add to
those favoring maintenance of standing forest rather than, for example, fossil
fuel substitution through plantations for charcoal.

1.3.
Opportunity cost accounting

The
inclusion of opportunity costs in carbon offset calculations raises difficult
and unresolved issues, especially in comparisons of non-forest land uses with
maintaining native forest.  First is
the need for balance, avoiding the usual tendency to include opportunity cost only
for one side of the comparison, namely the foregone profits of possible
non-forest land uses, but not the value of the environmental services that
would be sacrificed by clearing the forest.  The difficulty of quantifying these
services should not be used as an excuse for including only one side of the
comparison.

Even
in the more straightforward case of determining opportunity cost for deforested
land, wide margin for manipulating the results exists depending on the values
chosen.  The sale value of the land is
often taken as an indicator of what the land could produce under an alternative
use, and also represents a potential income source that could be obtained by
those who have fee simple title to their land.  What the sale value is is not always
clear.  In Brazil the "value of
the naked land" is established for tax purposes, but is much lower than
the price actually paid when land is sold.
In the State of Sao Paulo, the "value of the naked land" for
plantation land is only US$114 ha-1 (Ref. 2, p. 24), roughly an
order of magnitude lower than sale prices.
Sale price of forest land in Paragominas, in the eastern Amazonian state
of Para, is around US$150 ha-1 (Ref. 3).

The
appropriateness of opportunity costs as a basis for forest maintenance
compensation is often questionable.
To be valid as opportunity costs, the alternative land use against which
a project is compared must be a real option if the project is not implemented.  Opportunity costs are frequently judged
by the market value of the land.
However, if land on the scale of, for example, Amazonian forests, were
offered for sale, the price of land could be expected to fall.  Market limits would also constrain the
expansion of virtually any crop that might be planted were an attempt made to
put into practice the implied alternative of conversion to agriculture,
including the green revolution high-input crops that groups claiming
compensation for maintaining forest sometimes use as the indicator of
opportunity cost.  In addition, the
soil, climate and other characteristics of tropical forest areas are often not
appropriate for agriculture of this type.
Also, the human population often does not have the skills and capital
needed to implant the alternative land use assumed in claiming opportunity
costs.  For example, an indigenous
tribe would almost never be able to transform its forest habitat into fields of
green revolution crops.
Compensating such a tribe for the "opportunity costs" of
maintaining the forest on the basis of what the land could produce under
high-input agriculture (as has sometimes been proposed) would be
unjustifiable.  At the same time,
compensating a multinational firm for maintaining an equal area of forest using
the same opportunity cost criterion would be unfair to the indigenous tribe
that receives less for the same service.
Fundamentally, the problem is that compensation should be based on the
value of environmental services, not the "costs" of providing them.

Opportunity
costs, when based on realistic alternatives, represent the minimum price at
which one could be expected to find a seller for the services.  The costs of carbon offsets such as
carbon sequestration and avoided emissions (including fossil fuel substitution)
provide important information for formulating policies on global warming
responses, but should not be confused with the question of justice in designing
a new economy that provides proper compensation for maintenance of
environmental services.  The costs
of carbon offsets (including opportunity costs from the perspective of real
options available to the actors who would be involved) are necessary but not
sufficient information.  In the
context of international negotiations over global warming responses, the value
of the environmental services represents the information needed by the seller
of the services (the tropical countries) in negotiating the best obtainable
deal, while knowledge of the costs represents information needed by the buyer
of the services (the developed countries) in assessing how low they can force
competing potential providers to reduce their offers.  Both kinds of information are needed for
informed negotiation to take place.

2. BRAZIL'S FOREST SECTOR IN COMBATING
GLOBAL WARMING

2.1.
Silvicultural plantations

The
choice of a silvicultural plantation project, and associated technical
parameters, is not an easy one.
There is no single project that represents Brazilian plantations as a
global warming response option, as the marginal yield and other characteristics
of new plantations can be expected to change through time.  Here examples will be given with values
typical of current yields in existing plantations.

Plantations
can be classified into short-rotation and long-rotation plantations.  Short-rotation plantations in Brazil are
usually of Eucalyptus grown for pulpwood or charcoal, both with a time
between cuttings of about six years, while long-rotation plantations can be
either Eucalyptus or Pinus.
Here Eucalyptus is assumed on a 12-year cycle for use as sawlogs.
Parameters for carbon and economic
calculations for these and other options are given in the Appendix.  Changes in the stocks are calculated
explicitly for live components, while dead biomass components (coarse litter,
fine litter and below-ground dead) and soil stocks are assumed to be in
equilibrium, thereby exaggerating somewhat the dead biomass components in the
project calculations over the time horizon considered.  The time horizon is taken to be the
largest multiple of the time between harvests up to 100 years.  Using an even multiple of this time
(which includes both replantings and coppices) makes the results consistent
with the procedures outlined in this volume by Sathaye and coworkers1.

Carbon
stocks in plantations for pulpwood, charcoal and sawlogs are simulated over 100
years in Figures 1, 2 and 3, respectively.
Total carbon and above-ground live biomass stocks are shown for all
plantation types, together with wood products (for pulpwood and sawlog
plantations) and fossil fuel substitution (for charcoal plantations).  The components for above- and
below-ground dead biomass, below-ground dead and soil (to 20-cm depth) are
included in the total stocks shown, but are not indicated separately.

(Figures
1, 2 and 3 here)

All
charcoal is assumed (optimistically) to be a fossil fuel substitute
(substituting for mineral coal as a heat source and reducing agent in Brazil's
iron and steel industries).  No
adjustments are made for differences in energy content per t of C between coal
and charcoal and for proportions used for energy and iron reduction.  Pulpwood is all assumed to go into the
short-term wood products pool (average residence time 0.5 yrs).  Sawlog wood is assumed to be allocated
with 40% entering the short-term pool, 50% the medium-term pool (average
residence 5 yrs), 8% the long-term pool (average residence 50 yrs) and 2% the
very-long-term pool (average residence 500 yrs).  These proportions imply an average
product life of about 13 yrs for sawlogs.
Wood product pools decay exponentially (different from the assumption in
Ref. 1).

Calculation
of carbon benefits requires knowing not only the biomass and product flows of
the plantations themselves, but also those that would have existed in the
absence of the plantation project.
This would require an analysis at a national or larger scale, since the
output of the plantation affects the economy as a whole.  The standing biomass of the vegetation
present on the site where the plantation is installed is much more easily
determined, but this does not capture the plantation's effects on wood product
flows, logging, or deforestation.

Carbon
stocks, flows, and other parameters of plantations for pulpwood, charcoal and
sawlogs, and the current mix of these plantation types, are compared to prior
vegetation in Table 1.  Prior
vegetation is assumed to be the equilibrium landscape in deforested areas of
the Brazilian Legal Amazon (Ref. 4; modified from Ref. 5).  These areas, which totaled 41 X 106
ha in 199014  (excluding
areas flooded by hydroelectric dams) are a mosaic dominated by productive
pasture, degraded pasture, and secondary vegetation.  Brazil's Legal Amazon is an
administrative region covering 500 X 106 ha (about 60% of the
country); most of the present plantations are in the southern part of Brazil,
outside of the Legal Amazon.

(Table
1 here)

The
carbon stocks in biomass and wood products for a given area of plantation
are relatively easy to calculate, despite uncertainty.  The carbon consequences of a program
of plantations as a response option are much more difficult to assess.  A program-level analysis must not only
consider the plantation itself, but also the surrounding landscape to which
people may have moved when the plantation was installed.  A credible scenario with and without the
plantation program has to be constructed to allow a comparison.

2.2.
Sustainable timber management

A
response option such as sustainable management of native forest for timber may seem
reasonable, theoretically stocking away carbon in long-lasting wood products
from tropical timber.  However, even
under the unrealistically optimistic assumption adopted here or perfect
compliance with management plans, sustainable management does not constitute a
global warming "response option" when compared to native forest.

In
addition, proposals for sustainable management as a response option invariably
presume that the timber management system is not only sustainable in
silvicultural terms but is also sustainable in practice--rather than serving as
the first step in the process of deforestation.  Were analysis of timber management to
include realistic probabilities of the system being perverted to deforestation
(probabilities that most likely have values closer to one than to zero), the
result would be very large net releases of carbon.  The problem lies in fundamental
contradictions between maximizing financial return to the primary actors in
implanting forestry management for timber, and the criteria applied by those
interested in promoting sustainable systems for other reasons, including carbon
benefits6.

In
the sustainable timber management scenario considered here, production,
management and forest recovery are assumed to follow the results of Verissimo,
Barreto and coworkers3, 7, who have calculated that the 38 m3
ha-1 harvest rate predominating in the area of Paragominas, Para,
could be maintained on a 30-yr rotation if appropriate management were
applied.  The damage to the
remainder of the forest is assumed in the management scenario adopted here to
be half that prevailing in the region under normal practices at this harvest
intensity (see Appendix).  Wood
products are assumed to enter the different pools in the same proportions as
for sawlog plantations.

One
of the choices with which sustainable timber management can be compared is
unsustainable logging: the norm in Amazonia today.  Logging is assumed to occur at the 38 m3
ha-1 intensity prevailing in Paragominas.  Verissimo, Barreto and coworkers3,
7 calculated that recovery in Paragominas could occur in 90 yrs without
management.  The calculations
include an increment of 0.52 t C ha-1 yr-1 to the
above-ground live biomass pool (and proportional increments to the other
pools), as implied by this finding.
A second harvest after 90 yrs is not included in the calculations as, in
practice, potential returns that far in the future do not affect decisions of
landowners in Amazonia.

Carbon
stocks under timber management and unsustainable (one-time) logging are shown
in Figures 4 and 5.  Only biomass
carbon (live + dead, above- and below-ground), wood products, and total stocks
are shown.  Soil carbon to 20-cm
depth is included in the total but not shown separately.

(Figures
4 and 5 here)

Table
2 summarizes carbon stocks and other parameters for sustainable timber
management, unsustainable (one-time) logging, and forest in 1990 (virtually all
of which was outside of managed areas).
The carbon benefits or losses attributable to sustainable timber
management will obviously be very different depending on whether one assumes
that the alternative is the uncut forest or whether it is unsustainable logging
or deforestation.  As compared to
forest, sustainable timber management represents a net carbon loss, the
accumulations in forest products being insufficient to compensate for losses of
forest biomass over the 90-yr time horizon used for timber management and
logging (three 30-yr management cycles).

(Table
2 here)

2.3.
Deforestation reduction

2.3.1.
Carbon benefit of reducing deforestation.  Reducing Brazil's rate of deforestation
in Amazonia represents an obvious response option to global warming.  In 1990, deforestation resulted in a net
emission of approximately 307 X 106 t of C, or 6 times more carbon
than all fossil fuel use in Brazil10.  Carbon stocks in intact forest and
deforested land are summarized in Table 3.

(Table
3 here)

Since
the biomass of a hectare of Amazonian forest is much greater than that of a
hectare of silvicultural plantation, several hectares of plantation would have
to be established for the vegetation carbon stock to equal the loss from a
hectare of clearing.  In addition,
reduction of deforestation rate produces immediate benefits in avoided
emissions, whereas plantations will take years to fix carbon, adding to the
comparative advantage of deforestation reduction if any form of discounting is
applied.

The
principal impediments that discourage investment in deforestation reduction as
a response option are: 1) the difficulty of assessing the costs of avoiding a
hectare of clearing, 2) the need for changes in government policies to remove
motivations for deforestation (often these changes could be made at no
financial cost, and would have greater impact than monetary investments), and
3) lack of definition of criteria for assigning credit for avoided emissions.

2.3.2.
Costs of avoiding deforestation.
It is important to realize that reserve protection is not the same as
avoided deforestation.  For example,
consider a hypothetical project to "put a fence around" a piece of
forest (this is not the way forest protection works in a literal sense, but is
useful as an illustration).  If the
forest is far from the deforestation frontier the cost per hectare will be very
low, but the "avoided emission" will be zero, at least for a number
of years, since the area was not at risk anyway.  If the area chosen is at the
deforestation frontier, the cost per hectare will be extremely high, but the
carbon in the biomass stock can be more easily claimed as an "avoided
emission."  On the other hand,
those who would have been clearing forest in the now-fenced area will probably
simply go elsewhere in Amazonia and continue to clear--thereby reducing to zero
the net avoided emissions from the region.

Investment
in both research and organizational activities related to the broader policy
context of deforestation undoubtedly represents a cost-effective use of funds
motivated by concern over global warming.
It is difficult, however, to build a case for this that is both easily
understood and free of obvious uncertainties.  While an agency that has financed a
silvicultural plantation can point to the trees and proclaim convincingly
"We fixed that carbon," no such visual confirmation can be had from
calculations of reduced deforestation.
Above all, investment in reducing deforestation produces very little
that is apparent at a project level.
Despite these drawbacks, indications are many that deforestation
reduction is the general area that should have the highest priority.

It
is important to realize that allocation of resources among classes of possible
forest sector response options represents a zero-sum game from the standpoint
of funding for combating global warming.
At the Global Environmental Facility (GEF), which administers funds
under Agenda 21 (the action plan adopted at the United Nations Conference on
Environment and Development-UNCED, held in Rio de Janeiro in June 1992), forest
sector options are grouped in a single category (separate from energy options),
such that every dollar spent, for example, on promoting plantations means one
less dollar spent on reducing deforestation.

2.3.3.
Policy changes versus project investments.       Deforestation
in Brazilian Amazonia is done by different actors for different reasons.  Unlike many other tropical countries,
cattle ranching is by far the predominant form of land use in areas being
cleared in Brazil11.
Much (but by no means all) of the pasture is in large ranches.  Particularly in the 1970s and early
1980s these ranches received generous government incentives in the form of
various tax advantages and concessionary financing programs.  Ranchers were also especially benefited
by speculative profits, the value of land increasing more quickly than the rate
of inflation for many years.  Part
of this increase owes to the function of land as a "reserve of
value," part to the expectation of future speculative gains, and part to
highways and other infrastructure built in Amazonia with funds from taxpayers
in Brazil and in the other countries contributing to the multilateral banks
that financed many of these projects.
Deforestation is also done as a means of establishing land tenure12,
13.  This applies both to
small farmers and to large "land grabbers" (grileiros), who
obtain tracts by fraudulent and/or violent means.

The notion that deforestation is the
result of poor people clearing to feed themselves is promoted by politicians in
Brazilian Amazonia to justify their claims that anyone suggesting that
deforestation is harmful or should be reduced is against the people.  Central government officials have also
begun to blame the poor for clearing, using the (erroneous) argument that
clearing by large ranchers has been controlled by suspending incentives, so
that the remaining clearing is the work of small farmers.  A strong association between the size
distribution of properties and deforestation rate, sufficient to explain 74% of
the variance in deforestation rates among the Amazonian states, indicates that
neither of these claims is true14.  Relatively little deforestation in
Brazil is due to subsistence agriculture; established cattle ranching projects
continue to receive government subsidies, and ranches (many of which never had
incentives) continue to account for most deforestation.  In both 1990 and 1991 small farmers
(defined in Brazilian Amazonia as those with <100 ha of land) accounted for
about 30% of the deforestation activity, with 70% being done by ranchers.  The social costs of greatly reducing the
rate would therefore be much less than is implied by those who blame poverty
for deforestation.

Immediate
steps needed to reduce deforestation in Brazil include: applying heavy taxes to
take the profit out of land speculation, changing land titling procedures to
cease recognizing deforestation for cattle pasture as an
"improvement" (benfeitoria), removing the remaining subsidies,
reinforcing procedures for the Environmental Impact Report (RIMA), carrying out
agrarian reform both in Amazonia and the source areas of migrants, and offering
alternative employment in both rural and urban areas.  A more detailed description of needed
steps to slow deforestation is presented elsewhere15.

2.3.4.
Criteria for crediting avoided emissions.  "Incremental Costs" have been
adopted by the Scientific and Technical Advisory Panel (STAP) of the Global
Environment Facility (GEF) as the guiding criterion for awarding carbon credits
in the evaluation of projects competing for funding as global warming response
options.  While the logic of this
approach is clear in setting priorities for scarce financial resources, it also
has disturbing implications as a means of rewarding bad behavior, especially
with regard to tropical deforestation.
Is it fair that a country only gets credit if it is behaving badly and
then repents, while countries that behave well all along get no credit?  If a country is rapidly clearing its
forests and then stops as a result of policy changes, then the difference between
continuation of the old behavior and the new scenario represents forest
"saved," and represents a credit for avoided emissions.  In addition, because forest was being
rapidly cleared, any discounting or other time-preference weighting will
increase the benefits attributed to these avoided emissions, as compared, for
example, to emissions that might be avoided in a country where deforestation is
progressing slowly and would, in the no-project scenario, not occur anyway
until a more remote future date.

Establishing
a park in an area of forest that would not be cleared receives no credit,
whereas one in an area experiencing rapid clearing is heavily rewarded.  The park in the area with little
clearing is likely to be cheaper to establish.  How carbon credits are allotted can
therefore influence where parks are created.  The same considerations also apply to
biodiversity, not necessarily with the same results.  Depending on how benefits are counted,
the conservationist dogma can unravel that those interested in carbon offsets
and biodiversity preservation speak with one voice on tropical forest
protection.  In Brazil, the least
well-protected and most threatened types of forest are along the southern
boundary of Amazonia where reserve establishment is very expensive per unit of
area16.  Because carbon
atoms are interchangeable, a discounting approach to avoided emissions may be
appropriate.  In contrast,
biodiversity is not interchangeable, and indices of success in maintaining
biodiversity should focus on the diversity expected to be present at some
chosen time in the longer-term future (without discounting).

2.3.5.
Avoided deforestation as a permanent offset.  Avoided deforestation can be treated in
a manner similar to fossil fuel substitution.  Even though the clearing of a given
patch of forest may be postponed for only one year, just as the burning of a
given ton of coal may be postponed for only one year, the benefit can be
considered to be permanent.  One is
assuming that the avoided deforestation does not create a repressed demand for
clearing that will be compensated for in succeeding years with a more rapid
rate of felling.  This assumption
appears reasonable under Brazilian conditions.

3. COMPARISON OF OPTIONS

3.1.
Silvicultural plantations

Table
4 compares the carbon and monetary costs and benefits of forest sector response
options at the project-level in Brazil.
Carbon stocks are calculated at 3 discount rates for carbon: 0%, 1% and
5%.  The average stock at these
discount rates refers to the net present carbon value of the stock (discounted
at the specified rate) divided by the net present carbon value of one ton of
carbon held for the same period of time.
Discount rates for carbon therefore have no effect on options that
maintain carbon stocks at a constant level, such as maintaining forest without
alteration (assumed to be in equilibrium) or that have many short oscillations
over the time horizon, such as pulpwood plantations.  Discount rates greater than zero reduce
the attractiveness of options that accumulate carbon slowly over the period,
such as accumulation as fossil fuel substitution from charcoal plantations or,
to a lesser extent, in wood product pools in sawlog plantations.  Charcoal plantations can displace so
much fossil carbon over the course of the 96-yr time horizon for these
plantations that their average stocks approach that of maintaining the forest,
but only if the discount rate is zero.
At a 5% discount rate the average carbon stock for charcoal plantations
falls to almost half this value, while the benefit of forest maintenance
remains unchanged.

(Table
4 here)

Inclusion
of industries can have a great influence on the calculated profitability of
different options, as well as on the practicality of obtaining capital for
significant expansion of these land uses.
Where to draw the line between the response option and the rest of the
economy is not always clear.  In the
present analysis, charcoal manufacture costs are included for charcoal
plantations (but not pig-iron industry investments).  For pulp, only the plantations (not the
pulp mills) are included.  Given
that the investment needed for a pulp mill is very large compared to that for
the silvicultural plantations that supply it, lack of capital poses a significant
restraint on large-scale expansion (i.e., the "establishment cost
per ha" given in Table 4 greatly understates the cost of the full array of
investments needed to expand this land use).  For sawlog plantations, the present
analysis only includes the plantations themselves, while for timber management
and logging the sawmills are included.

Table
4 indicates that the net present value (NPV) of plantations for pulp is lower
than those for sawlogs, yet most plantations in Brazil are for pulp rather than
sawlogs.  Assuming that the price
and cost information used (based on figures from forest industry associations
in Sao Paulo: see Appendix) accurately reflects these factors, one would expect
greater planting of long-rotation plantations.  The explanation for this not occurring
is probably that it is even more profitable to obtain wood for the same markets
through unsustainable logging of natural forests in Amazonia.  However, at the seed distribution
facility maintained in Piracicaba, Sao Paulo by the University of Sao Paulo,
demand for seeds of species appropriate for long-rotation plantations has
increased sharply relative to demand for short-rotation species (Mario
Ferreira, personal communication, 1994).

3.1.
Timber management and unsustainable logging

It
is easy to see from Table 4 why sustainable timber management is not being
practiced on a significant scale:
considering a 12% discount rate, its net present value (NPV) is highly
negative, while unsustainable one-time logging yields substantial profits.  In financial terms (as distinguished
from economic or social terms), sustainable management has an internal rate of
return (IRR) of 3.8%, meaning that the discount rate would have to be less than
this value in order for the management scheme to have a positive NPV.  Since alternative investments that yield
more than this in real terms are readily available, including unsustainable
logging and land speculation, sustainable management for timber is unattractive
as an investment (as distinguished from government certification of
"forestry management plans" as part of the paperwork required for
legalizing logging operations).

The
tremendous per-hectare carbon benefit of avoiding deforestation is
apparent.  The rapid pace of
clearing makes the total potential for reduction in emissions far greater than
for other options, and the vast areas of still uncleared forest in Brazil mean
that the ultimate total benefit is much greater than the current annual
emissions imply.  Brazil's 1990
emissions of 307 X 106 t of carbon from deforestation10
contrasts with the 7 X 106 t of avoided carbon emissions from the
country's use of alcohol fuel and cogeneration from bagasse (the fiber
by-product of sugarcane crushing)18.

3.2.  Deforestation for ranching and
speculation

Deforestation
for extensive cattle ranching is far the worst option from the point of view of
carbon storage.  The information in
Table 4 indicates that it is also financially unattractive, yet this is by far
the most common fate of the rapidly expanding areas of deforested land in the
Brazilian Amazon today.  Something
is clearly missing from the monetary costs and benefits included in Table 4
that renders it unreliable as a predictor of behavior.  One essential factor is the effect of
land speculation, which can make extensive cattle ranching profitable despite
cash expenses that exceed the revenue from beef sales17.  Speculation, along with use of
deforestation as a means of establishing land tenure, could be greatly reduced
by government action.  Removing the
profits from speculation by levying and collecting heavy taxes on the
resale of land would remove the motive for clearing to protect investments in
future land sales.  Ceasing to
recognize clearing, especially for cattle pasture, as an "improvement"
would remove an additional motive for clearing for unproductive purposes.  These changes could be made at a minimum
of expense in monetary terms, but would require the political will to displease
those who benefit from the present system.

4. CONCLUSION AND WARNING

The
results of a project-level analysis such as those in Table 4 can serve only as
inputs to a program-level analysis.
They cannot be used for assessing the global warming benefit of
investing a given amount in any of these options, and therefore cannot provide
answers to policy questions without a program-level analysis.  All or part of a benefit may be canceled
by secondary effects elsewhere, or may even yield net global warming costs.  For example, plantations that have been
subsidized as global warming response options may have carbon benefits stolen
by the "invisible hand" when wood products derived from them simply
replace products that would otherwise have come from elsewhere, or when output
from subsidized plantations causes the price of plantation-produced wood to
fall and unsubsidized plantations elsewhere are consequently cut and replaced
with pasture or other low-biomass land uses.

5.) ACKNOWLEDGMENTS

I
thank the F-7 group led by Jayant Sathaye and Willy Makundi for their stimulation,
without which this analysis would never have been brought to completion.  R.I. Barbosa and S.V. Wilson made
valuable comments on the manuscript.
Funding came from the Pew Scholars Program in Conservation and the
Environment.

6.) APPENDIX: PARAMETERS FOR ECONOMIC AND
CARBON CALCULATIONS

6.1.
Plantations

For
all plantations: wood density=0.43 t m-3 (mean of 0.47 for Northeast
Brazil from Ref. 19 and 0.39 for Sao Paulo from Ref. 2, p. 11; above-ground
waste fraction=0.2; root death rate (proportion yr-1)=0.070 (assumed
equal to background mortality rate in forest trees); underground fraction=0.183
(calculated from Ref. 20 as mean of values for 6.1-yr-old Eucalyptus grandis
at Bom Despacho, Minas Gerais and 5.6-yr-old E. grandis at Carbonita, Minas
Gerais); coarse litter decay rate (proportion yr-1)=0.11 (assumed
equal to secondary forest coarse litter, calculated from Ref. 21, p. 72); fine
litter decay rate (proportion yr-1)=0.36 (mean of E. saligna
in Piracicaba, Sao Paulo from Ref. 22, p. 98 and of E. grandis at Bom
Despacho and Carbonita, Minas Gerais from Ref. 20); wood carbon content=0.45;
below-ground decay rate (fraction yr-1)=0.167 (assumed equal to
above-ground decay of primary forest remains in fields studied by Ref. 20, p.
72 and Ref. 37); larger stocks would accumulate decay rates lower than the
plantation biomass growth rate (fraction yr-1) of 0.254 at mid-cycle
implied by the yield of short-rotation Eucalyptus; slash and waste decay
rate (fraction yr-1)=0.11 (assumed equal to secondary forest remains
studied by Ref. 21, p. 72); logging substitution fraction=0.00; soil (0-20 cm)
carbon=6.7 t ha-1 (10.2 t ha-1 average 0-20 cm C content
of Amazonian soil multiplied by ratio of 3.8% plantation to 5.8% forest soil
(0-10 cm) C in Minas Gerais measured by Ref. 23, p. 19); coppicing is assumed
not to kill roots.

For
pulpwood plantations: percent of plantation area=65.924; yield=30.2
m3 ha-1 yr-1 19; number of coppices
per rotation=3; yrs between cutting=6; wood price=US$6 m-3 (Ref. 2,
p. 46); fraction of output to short-term pools=1.0; fossil fuel substitution
fraction=0.00.

For
charcoal plantations: charcoal conversion efficiency =0.371 t charcoal per t
firewood (Ref. 2, p. 11); charcoal price=US$27 m-3 (price in Carajas
area; also price in Sao Paulo: Ref. 2, p. 48); charcoal density=0.25 t m-3
(Ref. 2, p. 11); firewood usable fraction=0.95225, 26; charcoal
making cost=US$22 (assumed to be 35% of the value US$62 t-1
published by Ref. 2, p. 50); charcoal transport cost=US$8.57 t-1
(assumed same as firewood transport in Sorocaba, Sao Paulo calculated from Ref.
2, pp. 11, 50); percent of landscape=29.124; number of coppices per
rotation=3; time between cutting=6 yrs; yield=30.2 m3 ha-1
yr-1 19; calculated wood price=US$19.49 m-3;
charcoal carbon content= 0.7427; fossil fuel substitution
fraction=1.00.

Plantations
for sawlogs: percent of landscape=5.024; number of coppices=0;
rotation length=12 yrs; yield=20 m3 ha-1 yr-1 24;
wood price=US$15 m-3 Ref. 2, p. 46); fraction of output to
short-term pools=1.0; fraction of output to medium-term pools=0.03; fraction of
output to long-term pools=0.00; fossil fuel substitution fraction=0.00.

6.2.
Logging

6.2.1.
Parameters applicable both to sustainable timber management and unsustainable
logging: sawmill waste fraction= 0.533; sawmill costs exclusive
of taxes=US$34.03 m-3 3; transport cost to
sawmill=US$25.30 t-1 (assumed 1/3 of US$75.90 t-1 for
mahogany from Ref. 28); logging damage/harvest ratio without management=1.64
for above-ground and 0.41 for below-ground damage, not counting direct and
indirect damage from roads built to reach logging areas, calculated assuming
mean logging intensity of 38 m3 ha-1 3 and
regression of above-ground damage on logging intensity based on 11 measurements
available in studies (Refs. 3; 28; 29, p. 69; 30; 31, p. 260); below-ground
ratio from harvested trees=0.26; wood basic density=0.69 g cm-3 32;
wood carbon content=0.5033; logged forest tree mortality rate increase
over background mortality rate (fraction of trees yr-1)=0.01334;
duration of increased mortality effect=8 yrs (assumed equal to end of
observation period at Tapajos National Forest experiment studied by Ref. 34;
above-ground growth stimulation by logging=0.75 t ha-1 yr-1
(assumed proportional to 1.25 m3 ha-1 yr-1
stimulation in French Guiana provoked by 70 m3 ha-1 of
logging + 45 m3 ha-1 poisoning: Ref. 35, p. 18,
considering logging intensity of 38 m3 ha-1 yr-1
and logging damage ratio of 1.64); duration of growth stimulation effect=6.25
yrs (mean of effect in Suriname of 9 yrs: Ref. 36, p. 120, and Tapajos of 3.5
yrs: Ref. 34); decay rates (fraction yr-1) for below-ground dead
biomass, coarse litter and slash and waste=0.167 (assumed equal to above-ground
decay of primary forest remains in fields studied by Ref. 20, p. 72 and Ref.
37).  The following parameters,
based on Refs. 3 and 7 refer to quantities per hectare harvested (not
per hectare managed): logging intensity=38 m3; extraction costs=US$2051.24;
industrial (sawmill) costs=US$339.67; depreciation=US$69.12; gross
return=US$2772.00; taxes at 12% of gross return=US$332.64.

6.2.2.
Parameters for sustainable timber management only (from Refs. 3 and 7):
cutting cycle=30 yrs; management costs=US$113.00 ha-1
harvested.  Recovery of above-ground
live biomass to the original level for the above-ground live component is
assumed to occur over the 30-yr cycle in a linear fashion, which implies
increments of 0.90 t C ha-1 yr-1 to this component (and
proportional increments to other components) in order to conform to the general
finding of Verissimo, Barreto and coworkers3, 7 of sustainability.

6.2.3.
Parameters for unsustainable logging only:  An increment of 0.52 t C ha-1
yr-1 is added to the above-ground live biomass pool (and
proportional increments to the other pools), over the recovery period (implied
by the finding of Verissimo, Barreto and coworkers3, 7 that recovery
occurs over 90 yrs).

6.3.
Extensive ranching

Pasture
biomass (above- + below-ground mean over annual cycle in Ouro Preto do Oeste,
Rondonia)=10.67 t ha-1 (Ref. 38, p. 44); below-ground share of total
biomass=41% (Ref. 38, pp. 46-47); equilibrium landscape total biomass
calculation based on Markov matrix of transition probabilities between land-use
states4; parameters for soil carbon in layer compacted from top 20
cm of forest soil at Paragominas, Para (calculated by Ref. 39): forest soil C
content=0.91% (Ref. 40, pp. 31, 42), forest soil density=0.56 g cm-3
(Ref. 41, p. 95); pasture soil mean C content=0.56% (Ref. 40, pp. 31 and 42);
pasture soil density =1.15 g cm-3 (Ref. 41, p. 95).  Calculated values: forest soil C =10.19
t ha-1, pasture soil C=6.27 t ha-1, decrease from
conversion of forest to pasture=3.92 t ha-1; economic parameters
from Ref. 42 for Paragominas extensive ranching (per hectare): pasture and
livestock initial costs=US$307; annual gross return=US$31; taxes (@17% of gross
return)=US$5; other expenses=US$20 (N.B.: includes no fertilizers, which are
assumed not to be used--the normal course of events); duration of pasture
production=15 yrs.

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3. A. Verissimo, P. Barreto, M. M.
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4. P. M. Fearnside, Amazonian
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5. P. M. Fearnside, Greenhouse Gas
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6. P. M. Fearnside, Forest management in
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de madeira em Paragominas-PA, na Amazonia Oriental: Consideracoes ecologicas e
economicas (The potential of sustainable timber production in Paragominas, Para,
eastern Amazonia). In Anais do 7o Congresso Florestal Brasileiro,
Vol. 1. Sociedade Brasileira de Silvicultura/Sociedade Brasileira de
Engenheiros Florestais, Sao Paulo, Brazil (1993).

8. S. Ohta and S. Effendi, Ultisols of
"Lowland Dipterocarp Forest" in East Kalimantan, Indonesia.
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9. F. E. Putz and M. A. Pinard,
Reduced-impact logging as a carbon-offset method. Cons. Biol. 7(4),
755-757 (1993).

10. P. M. Fearnside, Amazonia and global
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11. P. M. Fearnside, Predominant land
uses in the Brazilian Amazon. In Alternatives to Deforestation: Towards
Sustainable Use of the Amazon Rain Forest (A. B. Anderson, Ed). Columbia
University Press, New York (1990).

12. P. M. Fearnside, The development of
the Amazon rain forest: Priority problems for the formulation of guidelines. Interciencia
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13. P. M. Fearnside, Causes of
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14. P. M. Fearnside, Deforestation in Brazilian
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15. P. M. Fearnside, A prescription for
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16-20, 39-40 (1989).

16. P. M. Fearnside and J. Ferraz, Identifying
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Conservation in Amazonian Rainforest (G. T. Prance, T. E. Lovejoy, A. B.
Rylands, A. A. dos Santos and C. Miller, Eds). Smithsonian Institution Press,
Washington, DC, (in press).

17. S. B. Hecht, R. B. Norgaard and C.
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13(5), 233-240 (1988).

18. J. Goldemberg and I. C. Macedo,
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19. A. E. Carpentieri, E. D. Larson and
J. Woods, Future biomass-based electricity supply in Northeast Brazil. Biomass
and Bioenergy 4(3), 149-173 (1993).

20. M. G. F. Reis and G. G. dos Reis,
Sequestro e armazenamento de carbono em florestas nativas e plantadas dos
Estados de Minas Gerais e Espirito Santo (Sequestration and storage of carbon
in native forests and plantations in the States of Minas Gerais and Espirito
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Sequestro de CO2: Uma Nova Oportunidade de Negocios para o Brasil
(M. Reis and M. Borgonavi, Eds). Companhia Vale do Rio Doce (CVRD), Rio de
Janeiro, Brazil (in press) (1994).

21. R. J. Buschbacher, Changes in
Productivity and Nutrient Cycling following Conversion of Amazon Rainforest to
Pasture. Ph.D. dissertation in ecology, University of Georgia, Athens, GA
(1984).

22. F. Poggiani, Ciclagem de nutrientes em ecossistemas de plantacoes
florestais de Eucalyptus e Pinus: Implicacoes silviculturais (Nutrient
cycles in forest plantation ecosystems of eucalyptus and pine: Silvicultural
implications). Livre-docente dissertation, Escola Superior de Agricultura Luis
de Queiroz (ESALQ), Piracicaba, Brazil (1985).

23. E. D. Bruna, A serapilheira de eucalipto: Efeitos de componentes
antibacterianos e de nutrientes na decomposicao (Eucalyptus litter: Effects
of antibacterial components and nutrients in decomposition). Masters thesis in
Agricultural Microbiology, Universidade Federal de Vicosa, Imprensa
Universitaria, Vicosa, Minas Gerais, Brazil (1985).

24. P. M. Fearnside, Plantation forestry
in Brazil: The potential impacts of climatic change (in preparation).

25. R. M. de Jesus, M. S. Menandro and C. E. Thibau, Manejo florestal em
Buriticupu (Forestry management in Buriticupu). Florestas Rio Doce, Linhares,
Espirito Santo, Brazil (nd. [1984]).

26. C. E. Thibau, Manejo da floresta tropical (Tropical forest
management). In Anais do 1o Simposio do Tropico Umido, Vol. II:
Flora e Florestas. Empresa Brasileira de Pesquisas Agropecuarias‑
Centro de Pesquisa Agropecuaria do Tropico Umido (EMBRAPA‑CPATU), Belem,
Para, Brazil (1986).

27. A. A. Correa, Conversao quimica de madeiras da Amazonia--carvao e
briquettes de carvao vegetal (Chemical conversion of Amazonian woods--charcoal
and charcoal briquettes). Acta Amazonica 18(1-2), 93-108
(1988).

28. A. Verissimo, P. Barreto, R. Tarifa
and C. Uhl, Extraction of a high-value resource in Amazonia: The case of
mahogany. For. Ecol. Mgmt. (in press).

29. A. Coic, G. Vieira and L. Minette,
Degats causes par l'exploitation forestiere sur le dispositif ZF2, Manaus,
Bresil.  In Atelier sur
l'Amenegement et la Conservation de l'Ecosysteme Forestier Tropical Humide,
Kourou, Guyane Francaise, Mar. 1990. Centre Technique Forestier Tropical, Centre de Guyane, Kourou, French
Guiana (1990).

30. C. Uhl and J. B. Kauffman,
Deforestation, fire susceptibility, and potential tree responses to fire in the
Eastern Amazon. Ecology 71(2), 437-449 (1990).

31. C. Uhl, A. Verissimo, M. M. Mattos,
Z. Brandino and I. C. G. Vieira, Social, econonomic, and ecological
consequences of selective logging in an Amazon frontier: The case of Tailandia.
For. Ecol. Mgmt. 46, 243-273 (1991).

32. P. M. Fearnside, Wood density for
estimating forest biomass in Brazilian Amazonia (in preparation).

33. P. M. Fearnside, N. Leal Filho and P.
M. Fernandes, Rainforest burning and the global carbon budget: Biomass,
combustion efficiency and charcoal formation in the Brazilian Amazon. J.
Geophys. Res. 98(D9), 16,733-16,743 (1993).

34. J. N. M. Silva and T. C. Whitmore,
Prospects of sustained yield management in the Brazilian Amazon. In Atelier
sur l'Amenegement et la Conservation de l'Ecosysteme Forestier Tropical Humide,
Kourou, Guyane Française, Mar. 1990. Centre Technique Forestier Tropical, Centre de
Guyane, Kourou, French Guiana (1990).

35. H. F. Maitre, J. M. Sarrailh and L.
Schmitt, Etat des recherches menees en Guyane Française sur la
transformation et l'amelioration des peuplements forestiers naturels. Paper presented
at the I.U.F.R.O. Symposium International: Impacts de l'Homme sur la Foret,
Strasbourg, France (1984).

36. N. R. de Graaf and R. L. H. Poels,
The CELOS management system: A polycyclic method for sustained timber
production in South American rain forest. In Alternatives to Deforestation:
Towards Sustainable Use of the Amazon Rain Forest (A. B. Anderson, Ed).
Columbia University Press, New York (1990).

37. C. Uhl and J. Saldarriaga, The disappearance
of wood mass following slash-and-burn agriculture in the Venezuelan Amazon. (manuscript) (nd).

38. P. M. Fearnside, A Ocupacao Humana de Rondonia: Impactos, Limites
e Planejamento (CNPq Relatorios de Pesquisa No. 5). Conselho Nacional de
Desenvolvimento Cientifico e Tecnologico (CNPq), Brasilia, Brazil (1989).

39. P. M. Fearnside, Brazil's Amazon
forest and the global carbon problem. Interciencia
10(4), 179‑186 (1985).

40. I. C. Falesi, Ecossistema de Pastagem Cultivada na Amazonia
Brasileira (Cultivated pasture ecosystems in Amazonian Brazil). Centro de
Pesquisa Agropecuaria do Tropico Umido (CPATU), Belem, Para, Brazil (1976).

41. S. B. Hecht, Deforestation in the
Amazon Basin: Magnitude, dynamics, and soil resource effects. Studies in Third
World Societies No. 13, 61‑108 (1981).

42. M. Mattos and C. Uhl, Economic and
ecological perspectives on ranching in the Eastern Amazon. World Devel. 22,
145-158 (1994).

FIGURE LEGENDS

Figure 1 -- Carbon stocks in pulpwood
plantations.

Figure 2 -- Carbon stocks in charcoal
plantations.

Figure 3 -- Carbon stocks in plantations
for sawlogs.

Figure 4 -- Carbon stocks in timber
management.

Figure 5 -- Carbon stocks in
unsustainable one-time logging.

TABLE
1:  COMPARISON OF PLANTATIONS WITH
PRIOR VEGETATION

Plantations

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑-

Pulpwood  Charcoal Sawlogs

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Average
carbon stocks (t ha-1):

Live
biomass C (above‑ + below ground) 23.7      23.5     31.1

Dead
biomass C (above‑ + below ground) 13.2      13.2     19.0

Soil
carbon (top 20 cm)                  6.7       6.7      6.7

Wood
products C                          1.9       1.9      7.9

Fossil
fuel substitution C               0.0     156.2      0.0

Total
carbon stock                      45.5     201.5     64.6

Other
parameters:

Average
wood product life (yrs)          0.5       0.0     12.6

Rotation
length (yrs)                   24        24       12

Coppices
(number per rotation)           3         3        0

Time
between harvests (yrs)              6         6       12

Yield
(m3 ha-1 yr-1)                      30.2      30.2     20.0

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

[Table
1, part 2]:

Deforested   Carbon benefit

----------- landscape    ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑----------

Current
mix             Pulpwood  Charcoal  Sawlogs  Current mix

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑------

24.0         14.0         9.7       9.5      17.1         10.0

13.5          1.1        12.1      12.1      17.9         12.4

6.7          6.3         0.4       0.4       0.4          0.4

2.2          0.0         1.9       1.9       7.9          2.2

45.5          0.0         0.0     156.2       0.0         45.5

91.8         21.4        24.1     180.1      43.3         70.5

1.0

23.4

2.9

6.3

29.7

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑--

TABLE
2:  COMPARISON OF SUSTAINABLE TIMBER
MANAGEMENT
WITH UNSUSTAINABLE LOGGING AND DEFORESTATION

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑-----------------

Carbon
stocks (t ha-1):

Live
biomass C (above‑ + below‑ground)

Dead
biomass C (above‑ + below‑ground)

Soil
C (top 20 cm)

Wood
products C (100‑yr average)

Total
C stock

Other
parameters:

Annual
yield (100‑yr average) (m3 ha-1)

Logging
intensity in first cycle (m3 ha-1)

Logging
intensity in subsequent cycles (m3 ha-1)

Harvest
cycle (yrs)

Duration
of yield (yrs)

Average
wood product life (yrs)

‑‑‑------------------‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

a  Comparing sustainable timber management
with remaining

primary forest.

b  Comparing sustainable timber management
with unsustainable

logging.

c  30% reduction: assumed half the 60% in
the top 30 cm used by

Ref. 8 cited by Ref.
9, p. 756.

[Table 2, part 2]:

Sustainable   Remaining    Carbon       Unsustain‑   Carbon

timber        forest       benefita     able         benefitb

management    in 1990                  logging

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑--------------

181.5        198.1        ‑16.6        167.9         13.7

17.1         15.6          1.5         14.9          2.1

6.8         10.2         ‑3.4          6.4c         0.4

3.5                      3.5          1.8          1.7

209.0        223.9        ‑15.0        191.0         18.0

1.52

38                                    38

38

30

>100                                     1

12.6                                  12.6

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑------------

TABLE
3:  COMPARISON OF INTACT FOREST AND
DEFORESTED AREAS

Remain-   Defor-   Change

ing       ested    in

forest    areas    carbon

in
1990
stock

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Carbon
stocks (t ha-1):

Live
biomass C (above‑ + below-ground) 198.1     14.0    ‑184.1

Dead
biomass C (above‑ + below-ground)  15.6      1.1     ‑14.5

Soil
C (top 20 cm of forest soil)       10.2      6.3      ‑3.9

Total
carbon stock                     223.9     21.4    ‑202.5

Other
parameters:

Other
environmental benefits          high      low

Monetary
returns                         0      low

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

TABLE
4:  COMPARISON OF PROJECT‑LEVEL
COSTS AND BENEFITS OF   FOREST
SECTOR RESPONSE OPTIONS IN BRAZIL

Discount  Units   Plantations

rate
for         ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑-

carbon
Pulp  Charcoal  Sawlogs

(%
yr-1)

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑----

Average
carbon stock        0   t ha-1      46     202     65

Average
carbon stock        1   t ha-1      46     176     63

Average
carbon stock        5   t ha-1      45     104     58

Establishment
cost ha-1      ‑‑   US$      625.00  625.00 625.00

Establishment
cost per t C  0    US$       13.60    3.47  14.45

Establishment
cost per t C  1    US$       13.68    3.55   9.90

Establishment
cost per t C  5    US$       13.98    5.99  10.76

Net
present value ha-1 b,c   ‑‑   US$      165.93   81.34 612.56

Net
present value per t C b 0    US$        6.88    0.45  14.16

Net
present value per t C b 1    US$        3.63    0.46   9.70

Net
present value per t C b 5    US$        3.71    0.78  10.54

Internal
rate of return         %
yr-1      14.6    13.3   17.6

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑----

a  No
carbon sequestration occurs (a net loss of C).

b Uses
discount rate for money of 12% (World Bank discount rate

for
Brazil).  All monetary values are in
1992 US$.

c NPV
of deforested landscape does not include speculative

returns
from land sales, which can make seemingly

unprofitable ranching
schemes lucrative (see Ref. 17).

[Table
4, part 2]:

Sustainable   Remaining  Unsus‑      Extensive

timber        forest     tainable    ranching

management    in 1990    logging

-----‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

209          222        191          21

209          222        187          21

209          222        179          21

1814.77         0       1811.00      307.00

‑‑a           ‑‑        ‑‑a         ‑‑a

‑‑a           ‑‑        ‑‑a         ‑‑a

‑‑a           ‑‑        ‑‑a         ‑‑a

‑479.19        ‑‑        961.00     ‑261.23

‑‑a           ‑‑        ‑‑a         ‑‑a

‑‑a           ‑-        ‑‑a         ‑‑a

‑‑a           ‑‑        ‑‑a         ‑‑a

3.8          ‑ --
infinite     ‑13.7

-----‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Fig. 1.

Fig. 2.

Fig 3.

Fig. 4.

Fig. 5.