Macro-economic analysis of forestry options on carbon sequestration in India

The forestry sector provides a number of climate change mitigation options. Apart from this ecological benefit, it has significant social and economic relevance. Implementation of forestry options requires large investments and sustained long-term planning. Thus there is a need for a detailed analysis of forestry options to understand their implications on stock and flow of carbon, required investments, value of forest wealth, contribution to GNP and livelihood, demand management, employment and foreign trade. There is a need to evaluate the additional spending on forestry by analysing the environmental (particularly carbon abatement), social and economic benefits. The biomass needs for India are expected to increase by two to three times by 2020. Depending upon the forest types, ownership patterns and land use patterns, feasible forestry options are identified. It is found among many supply options to be feasible to meet the 'demand based needs' with a mix of management options, species choices and organisational set up. A comparative static framework is used to analyze the macro-economic impacts. Forestry accounts for 1.84% of GNP in India. It is characterized by significant forward industrial linkages and least backward linkage. Forestry generates about 36 million person years of employment annually. India imports Rs. 15 billion worth of forest based materials annually. Implementation of the demand based forestry options can lead to a number of ecological, economic and institutional changes. The notable ones are: enhancement of C stock from 9578 to 17 094 Mt and a net annual C-sequestration from 73 to 149 Mt after accounting for all emissions; a trebling of the output of forestry sector from Rs. 49 billion to Rs. 146 billion annually; an increase in GDP contribution of forestry from Rs. 32 billion to Rs. 105 billion over a period of 35 years; an increase in annual employment level by 23 million person years, emergence of forestry as a net contributor of foreign exchange through trading of forestry products; and an increase in economic value of forest capital stock by Rs. 7260 billion with a cost benefit analysis showing forestry as a profitable option. Implementation of forestry options calls for an understanding of current forest policies and barriers which are analyzed and a number of policy options are suggested. (C) 1997 Elsevier Science B.V.

Assessment of genetic diversity and identification of core collection in sandalwood germplasm using RAPDS

Sandalwood is an economically important aromatic tree belonging to the family Santalaceae. The trees are used mainly for their fragrant heartwood and oil that have immense potential for foreign exchange. Very little information is available on the genetic diversity in this species. Hence studies were initiated and genetic diversity estimated using RAPD markers in 51 genotypes of Santalum album procured from different geographcial regions of India and three exotic lines of S. spicatum from Australia. Eleven selected Operon primers (10mer) generated a total of 156 consistent and unambiguous amplification products ranging from 200bp to 4kb. Rare and genotype specific bands were identified which could be effectively used to distinguish the genotypes. Genetic relationships within the genotypes were evaluated by generating a dissimilarity matrix based on Ward's method (Squared Euclidean distance). The phenetic dendrogram and the Principal Component Analysis generated, separated the 51 Indian genotypes from the three Australian lines. The cluster analysis indicated that sandalwood germplasm within India constitutes a broad genetic base with values of genetic dissimilarity ranging from 15 to 91 %. A core collection of 21 selected individuals revealed the same diversity of the entire population. The results show that RAPD analysis is an efficient marker technology for estimating genetic diversity and relatedness, thereby enabling the formulation of appropriate strategies for conservation, germplasm management, and selection of diverse parents for sandalwood improvement programmes.

Risk Minimizing Option Pricing for a Class of Exotic Options in a Markov-Modulated Market

We address risk minimizing option pricing in a regime switching market where the floating interest rate depends on a finite state Markov process. The growth rate and the volatility of the stock also depend on the Markov process. Using the minimal martingale measure, we show that the locally risk minimizing prices for certain exotic options satisfy a system of Black-Scholes partial differential equations with appropriate boundary conditions. We find the corresponding hedging strategies and the residual risk. We develop suitable numerical methods to compute option prices.