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Economic Analysis
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Source: CFS-AFM, GLFC |
The evolution of the Kyoto Protocol and global efforts to curb Greenhouse Gas (GHG) emissions have created a value for lowering atmospheric carbon, whether through sequestration (removing carbon from the atmosphere) or emissions reduction (not putting carbon in the atmosphere). The ability of trees to remove carbon from the atmosphere, coupled with the new value of carbon, increases the value of tree planting activities in Canada. This new type of value creates an interest in forestry by a diverse group of stakeholders that have not historically been interested in forest activities; namely, large final emitters (LFEs) and large investment organizations (such as pension and insurance funds).
Research has been focused on: collecting existing and new information required for analytical work, cost-benefit analysis, economic incentives, stakeholder pilot workshops, and land/species suitability modelling.
Read more about the:
Afforestation Feasibility Model (AFM)
The Great Lakes Forest Centre (GLFC) has developed a cost/benefit information
system designed to link the biology and the economics of afforestation
to lands that have been void of forest cover in Canada. The primary purpose
of this information system is to model potential future afforestation
rates in Canada given a range of financial incentives.
The model is spatially explicit and intended to capture as much spatial variation in both inputs and outputs as possible (e.g. productivity, costs, agricultural land values, etc.). The model includes wood production, below and above ground carbon sequestration and calculates break-even (equilibrium) carbon prices for marginal agricultural lands. Carbon sequestration is estimated using a simplified carbon-budget tracking algorithm. Variables are represented as probability distribution functions, facilitating uncertainty analysis using Monte-Carlo simulation and sensitivity tests.
For a more complete treatment of the AFM and its results, please click the link below:
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Photo: Newly established Hybrid Poplar plantation, Creston, BC |
The FAACS Afforestation Pilots have used, and built upon, a survey of landowners performed by Environics (2003). Five afforestation pilots were then undertaken across Canada as part of the FAACS initiative. The regional CFS forestry centres led the development and implementation of the afforestation pilots in their regions. In partnership with provinces, industry and landowner associations, the FAACS pilots were designed to test the responsiveness of landowners to a range of incentives that would encourage the expansion of forest cover in Canada for climate change and economic benefits.
To read more about the FAACS Pilot projects and the Environics Survey, please use the following links:
Atlantic
Pacific
Great Lakes
Laurentian
Northern
Environics Report
Incentives Review and Assessment
There are a range of economic incentives that could be used to
influence land use decisions. A survey of international experience with
land use incentives has been completed through the Incentives Review and
Assessment.
By studying incentive mechanisms currently and previously used in Canada and abroad, research to date has focused on developing a comprehensive list of potential afforestation incentives. This study also focused on the conditions that led to success or failure of the various incentives that show important considerations that could impact the design of future implementation efforts in Canada.
To help identify a practical set of potential incentives, the range of incentives was re-examined considering:
This research is being used to help understand that applicability of other countries’ incentives in a Canadian context. This has also been used to foster discussion in the Plantation Investment Forum.
To read more about our Economic Incentive Review, please read the following report:
Incentives Research
The CFS commissioned research papers on the potential impact of using
tax incentives and conservation easements to promote afforestation. Tax
incentives are potentially important because of the different stages of
project development they can affect and because of the flexibility they
afford in addressing different aspects of behaviour. Conservation easements
are potentially important because they are not well understood, but can
provide an important incentive to afforestation activities.
To download the economic incentives papers, please follow the links:
Index | Demonstration
Sites | Economic Analysis
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Option Analysis
Afforestation and the Kyoto Protocol
Land
Suitability | Report Summaries
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