Carbon benefits from Amazonian forest reserves: leakage accounting and the value of time

Amazonian forest reserves have significant carbon benefits, but the methodology used for accounting for these benefits will be critical in determining whether the powerful economic force represented by mitigation efforts to slow global warming will be applied to creating these reserves. Opportunities for reserve creation are quickly being lost as new areas are opened to deforestation though highway construction and other developments. Leakage, or the effects that a reserve or other mitigation project provokes outside of the project boundaries, is critical to a proper accounting of net carbon benefits. Protected areas in the Amazon have particularly great potential mitigation benefits over an extended time horizon. Over a 100-year time frame, virtually no unprotected forest is likely to remain, meaning that potential leakages (both leakage to the vicinity of the reserves and that displaced by removing protected areas from the land-grabbing market) should not matter much because any short-term leakage would be “recovered” eventually. The effect of the value attributed to time greatly influences the impact of leakage on benefits credited to reserves. Simple assumptions regarding leakage scenarios illustrate the benefits of reserves and the critical areas where agreement is necessary to make this option a practical component of mitigation efforts. The stakes are too high to allow further delays in reaching agreement on these issues.