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Local cost–benefit analysis for assessing the economic potential of afforestation/reforestation CDM on coca fields in the Peruvian Amazon

Background: Peru has a large extension of deforested lands converted into crops of Erythroxylum coca. Methods: A local cost–benefit analysis investigates the conversion of 500 ha of coca crops into sustainable agroforestry eligible under the Kyoto Protocol (afforestation/reforestation CDM) in the Amazon. Results: From a social and environmental perspective, CDM agroforestry generates more benefits than coca monoculture, although the cost–benefit analysis results show that illegal plantations generate higher profits. In a way, CDM makes the alternative of agroforestry to illegal coca more economically attractive than the same reforestations without carbon credit, with the advantage of attracting international investors interested in environmentally sustainable projects. Conclusion: For the permanence and success of Kyoto projects, local government and the UN continue to play a major role in avoiding leakage effects and risks of narcotraffic return.