What approach to discounting deforestation is used in the Cool Farm Platform Perennials module?
The CFP Perennials module currently uses equal discounting of deforestation, but we plan to switch to linear discounting for the release of CFP v3, in 2025. When the model was initially launched in March 2024, equal discounting was considered acceptable, and it is still deemed so by the draft LSRG guidance (as of July 2024).
The model assumes that deforestation occurs in the same year the crop trees are planted. This assumption addresses an issue in the previous model logic, where deforestation and reforestation during the crop lifecycle did not adjust the crop's hectarage, which should have changed. This discrepancy affects the accuracy of hectarage calculations and the overall perennial pathway.
Additionally, since the perennial crop partially compensates for deforestation, the accounting rules become complicated if deforestation happened several years before planting. It complicates accounting over different time periods as well. Therefore, the simplest and most defensible approach is to assume deforestation and planting occur in the same year and to amortize over 20 years.