New OECD Environment Working Paper: A global analysis of the cost-efficiency of forest carbon sequestration

R. Quentin Grafton, Hoang Long Chu, Harry Nelson, Gérard Bonnis; No. 185, 66 pp.;

This paper proposes a ranking of the 166 countries where forest carbon sequestration is the most cost-efficient. Taking into account the main cost factors leads to a more nuanced ranking than assuming that the most cost-effective projects would be in tropical areas with high rainfall. The ranking reflects differences in opportunity cost of land use and labour cost, the quality of the business environment, natural conditions such as wildfire risk and the level of avoided GHG emissions from alternative land use. Its results support the view that forests can be a cost-efficient way to offset GHG emissions and that significant cost reductions are possible by targeting country and sub-national regions.