Carbon monitoring costs and their effect on incentives to sequester carbon through forestry

Concerns have been expressed that participation of land-use change and forestry projects (LUCF) projects in mitigation markets may be constrained by high costs. Of particular concern are the transaction costs incurred in measuring, certifying and selling the carbon-sequestration services generated by LUCF projects. This paper addresses these issues by reviewing the implications of transaction and abatement costs for integrating LUCF projects in carbon-sequestration markets. In addition, an approach to estimating the abatement costs of such projects is demonstrated through four case studies of agroforestry systems located in Sumatra, Indonesia.