Opportunity costs refer to the potential economic gains that could be made if certain types of land use change are not happening, e.g. as part of an emission reduction program. If the opportunity costs are low relative to the amount of emission reduction that can be achieved by avoiding this category of land use change, it may be of interest to stakeholders of emission reduction to offset the opportunity costs and make contracts that secure that the carbon remains stored. The difference in economic value ($/ha), per unit avoidable emission (tCO2e/ha) takes the dimensions of a price ($/tCO2e). If the economic value of emission reduction elsewhere (e.g. on a virtual ‘carbon market’) is higher than the opportunity costs of avoiding emissions in a certain landscape, it may be financially attractive for all parties to develop contracts that ensure local emission reduction. Several other elements of price (implementation and monitoring plus transaction costs) also play a role, but if opportunity costs are higher than going market prices, discussions of economic incentives for voluntary emission reduction will be a non-starter.

Opportunity cost curves indicate how much emission reduction might be feasible at what price. The basis for their constructing is [1] The differences in economic value ($/ha) and [2] Time-averaged C stock (t C/ha) of any type of [3] land use change. The land use change may have occurred (if the opportunity cost is a retrospective analysis of recent history) or is deemed plausible in a forward looking scenario of land use change.

With these inputs, the program performs four steps (see the diagram):

1. Convert differences in carbon stocks into estimated emissions.
2. Construct a table of opportunity costs for every type of land use change from the differences in NPV and C stocks
3. Determine the actual emissions for each cell in the matrix from the area involved and the emissions per unit area
4. Present the cumulative emission total after sorting by opportunity cost

Together these four steps lead to a two-dimensional graph charting the opportunity costs of avoiding deforesting land-use changes against volume of carbon-dioxide equivalent emissions.
 

Steps in deriving an opportunity cost (OpCost) curve that relates the changes in economic profitability (net present value) and typical carbon stocks of land-use (LU) systems, to a land-use change matrix that describes the changes that have occurred (for a retrospective OpCost curve) or might occur (for a scenario OpCost curve).

(see the REDD Abacus SP - User Manual for more information about the software)

If you have problems on uninstalling the older version of Abacus (ver 1.0.x), you can try to download the Abacus uninstaller batch script here (abacus1.0.x_remover.zip). extract the file and run it (double click on the extracted file)

• You need to install a Java 1.6.0 (or later) virtual machine. You can download one from Java website or contact your OS manufacturer.
• After downloading open a shell and,  cd to the directory where you downloaded the installer.
• At the prompt type:  sh ./abacus.bin

Click here to download (Linux binary, 9 mb)

• After downloading, double-click abacus
• Requires Mac OS X 10.0 or later
• The compressed installer should be recognized by Stuffit Expander and should automatically be expanded after downloading.If it is not expanded, you can expand it manually using StuffIt Expander 6.0 or later.
• If you have any problems launching the installer once it has been expanded, make sure that the compressed installer was expanded using Stuffit Expander. If you continue to have problems, please contact technical support.

Click here to download (Mac OS binary, 8 mb)

• Abacus Project Sample (zip)

The sample file above is a dummy data used for testing the software.
Later we will share project sample from some actual cases, including its documentation.