Technical report

Economic potential of land-use change and forestry for carbon sequestration and poverty reduction

Date released
14 May 2008
Publication Code

Cacho, O., Hean, R., Ginoga, K., Wise, R., Djaenudin, D., Lugina, M., Wulan, Y., Subarudi, Lusiana, B., van Noordwijk, M. and Khasanah, N.


Concerns over global warming have led to the establishment of markets for greenhouse gas emissions, in particular for carbon dioxide (CO2). Tree-based systems are a convenient way of reducing net emissions by sequestering CO2 from the atmosphere. Carbon credits do not require transport to markets, and are thus appealing as a commodity for rural smallholders in developing countries. However, as for any other commodity, profitability is related to prices received, costs of production (greenhouse gas abatement), and transaction costs, which remain largely unknown for smallholders in developing countries. This research focused on several agroforestry systems that have been adopted by smallholders in three regions of Indonesia, looking at how smallholders compare with other landholders in terms of efficiency in sequestering carbon, whether smallholders will want to adopt carbon-sequestering activities, and what sorts of policies and projects will underpin smallholder involvement.