Skip to main content

2009-06-24 | project

Ex-ante Economic Analysis of Kenya’s particpation in the proposed REDD climate mitigation scheme

Tropical deforestation, degradation and forest clearing are important contributors to green house emissions. Some studies approximate that as much as 25% of all carbon dioxide arise from deforestation and degradation.

Global climate policy initiatives are now being proposed to compensate tropical forest nations for reducing the emissions of carbon from deforestation and forest degradation. These efforts have the potential to address a substantial share of the world’s emissions which arise from deforestation. Currently, there are ongoing plans to include Reduced Emissions from avoided Deforestation and Degradation (REDD) as part of the Clean Development Mechanism (CDM) after expiry of the current Kyoto protocol in 2012. The idea behind REDD is to establish a viable, internationally robust and well funded mechanism that would give tropical forest countries with economic incentive to slow down the rate at which they deforest and degrade their forests.

Forest carbon is in a sense a new commodity that must be measured to acceptable standards for the commodity to exist. This will require credible carbon-monitoring programs to be put in place. Carbon monitoring is subject to both fixed and variable costs and these will affect the economic viability of climate mitigation schemes. Kenya is one of the countries in Africa that will participate in the REDD scheme once it is established. However, for it to be successful, the country will have to invest in capacity to monitor and report their deforestation rates and also put in place measures to slow down deforestation.There is currently scanty information on the economic impacts of participating in the proposed REDD for many tropical countries. However, many outstanding issues surrounding REDD and other climate related mitigation strategies remain unclear. For instance, the economic impacts of climate change mitigation and adaptation are poorly understood. In order for concerned parties to take appropriate action, there is need to provide them with the relevant and accurate information on the likely economic impacts of mitigation measures against climate change. This information can be used in designing incentives to guide actions of different actors.

The overall aim of this study is to a carry out a comprehensive economic analysis of Kenya's potential participation in the REDD scheme. The study will seek to identify, quantify and analyse different categories of economic impacts that are likely to arise from participation in the REDD scheme. Different potential options for reducing deforestation under the REDD scheme and their likely economic ramifications will also be analysed. The results of the study will highlight the effectiveness, efficiency, risk and uncertainty, sustainability and the effect of REDD as a potential climate mitigation strategy. The results of the study will be useful to inform policy makers in Kenya in the ongoing REDD debates. It will shed light on areas that the government might need to intervene to make Kenya competetive in the emerging carbon markets. The study will also be useful for the international audience with interest in climate mitigation on the economic implications of REDD on tropical countries.

Project Advisors:
Gunnar Köhlin
Thomas Sterner