9.6.6.1 Leakage
There is no indication that leakage effects are necessarily higher in forestry than in project activities in other sectors but they can be significant (Chomitz, 2002). Some studies distinguish between primary and secondary effects. A primary effect is defined as resulting from agents that perform land use activities reflected in the baseline. Populations previously active on the project area may shift their activities to other areas. In land protection projects, logging companies may shift operations or buy timber from outside the project area to compensate for reduced supply of the commodity (activity outsourcing). Secondary leakage is not linked to project participants or previous actors on the area. It is often a market effect, where a project increases (by forest plantation) or decreases (deforestation avoidance) wood supply. Quantitative estimates of leakage (Table 9.9) suggest that leakage varies by mitigation activity and region.
The order of magnitude and even the direction of leakage (negative versus positive), however, depend on the project design (Schwarze et al., 2003). Leakage risk is likely to be low if a whole country or sector is involved in the mitigation activity, or if project activities are for subsistence and do not affect timber or other product markets. There are also well-documented methods to minimize leakage of project-based activities. For example, afforestation projects can be combined with biomass energy plants, or they may promote the use of timber as construction material. Fostering agricultural intensification in parallel can minimize negative leakage from increased local land demand. Where a project reduces deforestation, it can also reduce pressure on forest lands, for example, by intensifying the availability of fuel wood from other sources for local communities. Projects can be designed to engage local people formerly responsible for deforestation in alternative income-generating activities (Sohngen and Brown, 2004).
Leakage appears to have a time dimension as well, due to the dynamics of the forest carbon cycle and management (for example, timing of harvest, planting and regrowth, or protection). Analysis in the USA indicates that national afforestation in response to a carbon price of 15 US$/tCO2 would have 39% leakage in the first two decades, but decline to 24% leakage over five to ten decades, due to forest management dynamics (US EPA, 2005).
Table 9.9: Forestry mitigation activity leakage estimates by activity, estimation method and region from the literature
| Activity | Region | Leakage estimation method | Estimated leakage rate (% of carbon mitigation) | Source |
|---|
| Afforestation: tropical region estimates |
| Afforestation of degraded lands | Kolar district, Karnataka, India hypothetical project | Household wood demand survey | 0.02 | Ravindranath, et al., 2007 |
| Plantations, forest conservation, agro-forestry of degraded lands | Magat watershed, Philippines hypothetical project | Historical rates of technology adoption | 19 – 41 | Authors estimates based on Lasco et al., 2007 |
| Afforestation on small landowner parcels | Scolel Té project, Chiapas, Mexico | Household wood demand survey | 0 | De Jong et al., 2007 |
| (some positive leakage) |
| Afforestation degraded uplands | Betalghat hypothetical project, Uttaranchal, India | Household wood demand survey | 10 | Hooda et al., 2007 |
| from fuelwood, fodder |
| Afforestation, farm forestry | Bazpur hypothetical project, Uttaranchal, India | Household wood demand survey | 20 | Hooda et al., 2007 |
| from fuelwood, poles |
| Afforestation: global and temperate region estimates |
| Afforestation (plantation establishment) | Global | PEM | 0.4-15.6 | Sedjo and Sohngen, 2000 |
| Afforestation | USA-wide | PEM | 18-42 | Murray et al., 2004 |
| Afforestation only | USA-wide | PEM | 24 | US EPA, 2005 |
| Afforestation and forest management jointly | USA-wide | PEM | -2.8 a) | US EPA, 2005 |
| Avoided deforestation: tropical region estimates |
| Avoided deforestation | Bolivia, Noel Kempff project and national | PEM | 2-38 discounted | Sohngen and Brown, 2004 |
| 5-42 undiscounted |
| Avoided deforestation and biofuels: temperate region estimates |
| Avoided deforestation | Northeast USA | PEM | 41-43 | US EPA, 2005 |
| Avoided deforestation | Rest of USA | PEM | 0-92 | US EPA, 2005 |
| Avoided deforestation | Pacific Northwest USA | PEM | 8-16 | US EPA, 2005 |
| Avoided deforestation (reduced timber sales) | Pacific Northwest USA | Econometric model | 43 West region | Wear and Murray, 2004 |
| 58 Continental US |
| 84 US and Canada |
| Biofuel production (short rotation woody crops) | USA | PEM | 0.2 | US EPA, 2005 |