Way Tenong and Sidrap: tree planting and poverty alleviation, Indonesia

Under the regime of the Kyoto Protocol, the CDM through its window for ‘reforestation’ projects can facilitate the transformation of lands that were deforested before 1990 into tree-based land use systems. However, any proposed application of the mechanism will have to ensure additionality (increases of carbon stock in the accounting area due to the CDM intervention over and above what would be expected for a location-specific baseline) and account for leakage (negative effects on carbon stocks outside of the accounting area that are causally linked to the CDM intervention). Furthermore, the mechanism will also have to qualify as ‘development’, by providing positive socio-economic impacts for the local community by alleviating poverty in the landscape. A direct consequence of the multiple administrative requirements that follow from these concerns, however, are the substantial ‘transaction costs’ (Cacho et al . 2002; Cacho et al . 2003; Cacho 2006). A specific issue derives from the confounding of ‘leakage’ and ‘additionality’. The use of nearby ‘control’ areas for appraising additionality assumes that leakage is negligible, while their use for quantification of ‘leakage’ assumes the absence of spontaneous change. As the multiple drivers of land use and land cover change are hard to predict, the ex ante impact appraisal of carbon sequestration projects is difficult and the economic value on the global carbon market only applies to ‘certified emission reduction’ statements, after the fact. The procedures before the start of a project thus include substantial risks to all parties involved, translated to further transaction costs.

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