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The Clean Development Mechanism (CDM) was created under the Kyoto Protocol, in
order to help industrialized countries achieve their Greenhouse Gas (GHG) emission
reduction targets at a lower cost. A second objective of the CDM is to help developing
countries achieve sustainable development. To become eligible these projects have to
demonstrate their additionality, and have a positive impact on local communities’
livelihoods. But the methodologies that have been proposed seem unsatisfactory, and
the social impacts are often debated. This paper provides new insights on these
methodologies, their weaknesses and potential improvements, and explores the social
impacts of an afforestation/reforestation CDM activity with a high carbon sequestration
potential. We studied a large-scale pulpwood plantation in Indonesia, which is
perceived as a way to sequestrate great quantities of carbon in a short time, and as an
alternative to natural forest supplies for the domestic pulp industry. We collected
complete data on the establishment and production costs, and the carbon
sequestration potential. We also took advantage of our ongoing research on the
Indonesian Pulp & Paper (P&P) sector to interpret these results, and evaluate the
relevance of widely used and proposed methodologies for additionality assessment.
Finally, research on site allowed us to obtain data on the plantation’s impact on the
people living nearby. According to our research, fast-growing tree plantations face
production costs far higher than revenues gained from the sale of carbon credits, even
with a relatively important carbon sequestration. But calculations made according to
usual methodologies can be misleading. We show that context analysis is more
relevant, and that profitability calculations lead to wrong conclusions. From a social
point of view, pulpwood plantation projects could increase livelihoods in the short term,
but this depends very much on the opportunities for locals to combine employment in
the plantation with land uses generating higher incomes per hectare.