Estimating Leakage from Forest Carbon Sequestration Programs

L eakage from forest carbon seques- tion has been widely acclaimed as an optration— the amount of a program’s direct carbon tion for mitigating greenhouse gas emisbenefits undermined by carbon releases else- sions (GHGE). Land use change and where—depends critically on demanders’ability to forestry (LUCF) are seen asmitigation opsubstitute non-reserved timber for timber targeted tions with potentially low oppor tunity by the program. A nalytic, econometric, and sectorcosts and high level optimization models are combined to estimate ancillary benefits (see IPCC leakage from different forest carbon sequestration 2000; Bush 2002) . activities. Empirical estimates for the United States As policy proposals to mitigate climate show leakage ranges from minimal (, 10%) to change have evolved from the 1992 United enormous (. 90%), depending on the activity and Nations Earth Summit in Rio de Janiero, region. These results suggest that leakage effects it has become clear that, at least in the should not be ignored in accounting for the net short run, restrictions on the emission of level of greenhouse gas offsets from land use greenhouse gases (GHGs) would be conchange and forestry mitigation activities.