Compensating for the costs of reducing deforestation in Papua New Guinea

This article examines the abatement in greenhouse gas emissions achievable in Papua New Guinea by a reduction in deforestation and forest degradation (REDD) and its opportunity costs. The total abatement achieved by the cessation of logging for export in 2012 is estimated at between 658 and 788 million tonnes (Mt) of carbon dioxide, at an opportunity cost nationally of between US$3.40 and US$5.64/t. Abatement achieved by the cessation of new oil-palm establishment totals between 45 and 113 Mt, at a national cost of about US$40/t. Stakeholder opportunity costs, as well as national costs, are estimated for logging and oil-palm. Recent work that quantifies emissions from deforestation in Papua New Guinea is integrated with the author's financial models for the logging and palm-oil industries. A fuller understanding is achieved of the complexity of designing and implementing policies for REDD. © 2010 The Australian National University