Consequences of Co-Benefits for the Efficient Design of Carbon Sequestration Programs, The

In this paper, we study the social efficiency of private carbon markets that include trading in agricultural soil carbon sequestration when there are significant cobenefits (positive environmental externalities) associated with the practices that sequester carbon. Likewise, we investigate the efficiency of government run conservation programs that are designed to promote a broad array of environmental attributes (both carbon sequestration and its cobenefits) for the supply of carbon. Finally, policy design and efficiency issues associated with the potential interplay between a private carbon market and a government conservation program are studied. Empirical analyses for an area that represents a significant potential source of carbon sequestration and its associated cobenefits illustrate the magnitude and complexity of these issues in real world policy design.

Carbon Sequestration in Agriculture: an Offset Program versus Other Conservation Programs

In this paper, we study the social efficiency of private carbon markets that include trading in agricultural soil carbon sequestration when there are significant co-benefits (positive environmental externalities) associated with the practices that sequester carbon. Likewise, we investigate the efficiency of government run conservation programs that are designed to promote a broad array of environmental attributes (both carbon sequestration and its co-benefits) for the supply of carbon. Finally, policy design and efficiency issues associated with the potential interplay between a private carbon market and a government conservation program are studied. Empirical analyses for an area that represents a significant potential source of carbon sequestration and its associated co-benefits illustrate the magnitude and complexity of these issues in real world policy design.Environmental Economics and Policy,

Carbon Sequestration, Co-Benefits, and Conservation Programs

Land use changes to sequester carbon also provide ﾓco-benefits,ﾔ some of which (for example, water quality) have attracted at least as much attention as carbon storage. The non-separability of these co-benefits presents a challenge for policy design. If carbon markets are employed, then social efficiency will depend on how we take into account co-benefits, that is, externalities, in such markets. If carbon sequestration is incorporated into conservation programs, then the weight given to carbon sequestration relative to its co-benefits will partly shape these programs. Using the Conservation Reserve Program (CRP) as an example, we show that CRP has been sequestering carbon, which was not an intended objective of the program. We also demonstrate that more carbon would have been sequestered had CRP targeted this objective, although the ﾓco-benefitsﾔ would have increased or decreased.

Cac Versus Incentive-Based Instruments in Agriculture: The Case of the Conservation Reserve Program

In this paper, we examine command-and-control (CAC) policies and market-based instruments (MBI) in the context of the Conservation Reserve Program (CRP). The CRP, an MBI in the form of subsidies, is by far the largest agro-environmental policy implemented to date. We compare the environmental performance of the CRP as implemented to a few counterfactual CAC polices using EPIC (Environmental Policy Integrated Climate), a bio-physical simulation model. In the context of multiple environmental indicators, no policy alternative emerges as a clear winner. The importance of the choice and design of CAC policies is emphasized. Keywords: command-and-control policy, Conservation Reserve Program, market-based instrument.

Environmental Conservation in Agriculture: Land Retirement Versus Changing Practices on Working Land

The study develops a conceptual framework for analyzing the allocation of conservation funds via selectively offering incentive payments to farmers for enrolling in one of two mutually exclusive agricultural conservation programs: retiring land from production or changing farming practices on land that remains in production. We investigate how the existence of a pre-fixed budget allocation between the programs affects the amounts of environmental benefits obtainable under alternative policy implementation schemes. The framework is applied to a major agricultural production region using field-scale data in conjunction with empirical models of land retirement and conservation tillage adoption, and a biophysical process simulation model for the environmental benefits of carbon sequestration and reduction in soil erosion.

Quantum Information Approach to Bose-Einstein Condensate in a Tilted Double-Well System

We study the ground state properties of bosons in a tilted double-well system. We use fidelity susceptibility to identify the possible ground state transitions under different tilt values. For a very small tilt (for example $10^{-10}$), two transitions are found. For a moderate tilt (for example $10^{-3}$), only one transition is found. For a large tilt (for example $10^{-1}$), no transition is found. We explain this by analyzing the spectrum of the ground state. The quantum discord and total correlation of the ground state under different tilts are also calculated to indicate those transitions. In the transition region, both quantities have peaks decaying exponentially with particle number $N$. This means for a finite-size system the transition region cannot be explained by the mean-field theory, but in the large-$N$ limit it can be.Comment: 5 pages, 5 figures, slightly different from the published versio

Carbon Sequestration in Agriculture: Value and Implementation

Examining the value of carbon sequestration in a dynamic model, the authors demonstrate that unless the sequestration is permanent, it is only a fraction of the value of emission abatement. The magnitude of the fraction increases in the duration of sequestration, the natural decay rate of carbon, and the discount rate. The authors also show that sinks should be used as early as possible in order to optimally reduce the carbon stock. Finally, the authors propose and assess three mechanisms for efficiently introducing sequestration into a carbon permit trading market: a pay-as-you-go system, a variable-length-contract system, and a carbon-annuity-account system. All are efficient, but all may not be equally feasible to implement

Optimal Design of Permit Markets with an Ex Ante Pollution Target

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal permit cap is not necessarily equal to the ex ante pollution target; and (3) the optimal trading ratio is not necessarily equal to the delivery coefficient even when it is known with certainty. Intuitively, since the regulator is only required to meet a pollution target on average, she can set the trading ratio and total permit cap such that there will be more pollution when abatement costs are high and less pollution when abatement costs are low. Information on firms’ abatement costs is important in order for the regulator to induce the optimal alignment between pollution level and abatement costs

Carbon Sequestration, Co-Benefits, and Conservation Programs

Land use changes to sequester carbon also provide co-benefits, some of which (for example, water quality) have attracted at least as much attention as carbon storage. The non-separability of these co-benefits presents a challenge for policy design. If carbon markets are employed, then social efficiency will depend on how we take into account co-benefits, that is, externalities, in such markets. If carbon sequestration is incorporated into conservation programs, then the weight given to carbon sequestration relative to its co-benefits will partly shape these programs. Using the Conservation Reserve Program (CRP) as an example, we show that CRP has been sequestering carbon, which was not an intended objective of the program. We also demonstrate that more carbon would have been sequestered had CRP targeted this objective, although the co-benefits would have increased or decreased