As carbon becomes a valuable commodity traded in markets for greenhouse-gas emissions, there will be incentives to adopt land uses that capture carbon payments as well as produce other marketable outputs, including biofuels. These production systems may be more sustainable than many of those in current use, but there is also the risk that the growing demand for biofuels will cause land degradation, deforestation and food scarcity. The land-use patterns that arise as a result of carbon markets will largely depend on the 'rules of the game', which will be determined by governments and international agencies. This paper addresses these issues by reviewing the literature on the potential for terrestrial carbon pools to contribute to mitigating climate change. The review covers studies from forestry, ecology, economics, agriculture and other disciplines, reflecting the complexity of the issues and the range of research priorities that will need to be addressed in the next few decades. There is strong evidence that the potential for land-use systems to contribute to climate mitigation efforts is significant, but for this to occur it will be necessary that landholders receive incentives to change their current land uses. These incentives are linked to scientific, institutional and economic factors. An essential component will be the development of markets that allow the trade of emission reductions from both the energy sector and the land-use change and forestry (LUCF) sector. Technical factors that will contribute to success include: creation and analysis of remote-sensing and socio-economic datasets to estimate credible baselines; development of simple and inexpensive techniques for measuring soil carbon; and development of agreed standards that relate land-use and biophysical characteristics of a site to carbon content. Much research is being done to address these factors, and monitoring and reporting systems for LUCF activities are operational under the Kyoto Protocol, but obstacles remain for widespread implementation. There is a window of opportunity for projects to be developed that restore degraded croplands, avoid deforestation and encourage reforestation. This opportunity has a limited life span that depends on the duration of the transition period to low-carbon energy technologies that will ultimately carry the burden of climate change mitigation.
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