Economic Feasibility of REDD Project for Preventing Deforestation in North Korea

摘要

This study aims to verify the economic validity of the REDD project in North Korea by estimating the potential carbon credits and the cost of REDD project. The REDD potential credits of North Korea are estimated based on the international statistics of forest area and population from 1990 to 2010, and the cost of REDD project is estimated indirectly by annual land opportunity cost of agriculture assuming that South Korea will aid the food production per area in North Korea. When the 25% reduction scenario was applied to the annual deforestation rate in North Korea, the potential REDD credits were estimated to be 4,232 million-5,290 milliontC02eq. for 20 years. It would account for 28-35% of South Korea's national medium-term greenhouse gas reductiontarget. On the other hand, the break-even price of REDD project was calculated as the profit of agriculture in the land available by forest conversion in North Korea. It was estimated to be 19.19$/tCO_2eq. when the non-permanence risk of forest conserved through a REDD contract is assumed to be 20%. This price is higher than the price of REDD carbon credit 5$/tCO_2eq. dealt in the 2010 voluntary carbon market, leading to no economic feasibility. However, REDD project provides co-benefits besides climate mitigation. As previous studies indicate, the break-even price is lower than 20$/tCO_2eq., which is the social marginal cost of greenhouse gas emissions by loss of forest. Therefore REDD in North Korea can be justified against the social benefits. Theeconomic feasibility of REDD project in North Korea can be largely influenced by the risk percentage. Thus, North Korean REDD project needs a strong guarantee and involvement by the government and people of North Korea to assure the project's economic feasibility.