Land-Use Change and Carbon Sinks

When and if the United States chooses to implement a greenhouse gas reduction program, it will be necessary to decide whether carbon sequestration policies — such as those that promote forestation and discourage deforestation — should be part of the domestic portfolio of compliance activities. We investigate the cost of forest-based carbon sequestration. In contrast with previous approaches, we econometrically examine micro-data on revealed landowner preferences, modeling six major private land uses in a comprehensive analysis of the contiguous United States. The econometric estimates are used to simulate landowner responses to sequestration policies. Key commodity prices are treated as endogenous and a carbon sink model is used to predict changes in carbon storage. Our estimated marginal costs of carbon sequestration are greater than those from previous engineering cost analyses and sectoral optimization models. Our estimated sequestration supply function is similar to the carbon abatement supply function from energy-based analyses, suggesting that forest-based carbon sequestration merits inclusion in a cost-effective portfolio of domestic U.S. climate change strategies.abatement; carbon; climate change; costs; forestry; greenhouse gases; land use; landuse change; sequestration

The optimal carbon sequestration in agricultural soils : does the dynamics of the physical process matter ?

The Kyoto Protocol, which came in force in February 2005, allows countries to resort to «supplementary activities» consisting particularly in carbon sequestration in agricultural soils. Existing papers studying the optimal carbon sequestration recognize the importance of the temporality of sequestration, but overlook the fact that it is a dissymmetric dynamic process. This paper takes explicitely into account the temporality of sequestration. Its first contribution is technical : we solve an optimal control problem with two stages and a dissymmetric dynamic process. The second contribution is empirical : we show that the error made when sequestration is supposed immediate can be very significant, and we exhibit numerically the optimal path of sequestration/de-sequestration for specific benefit, damage and cost functions, and a calibration that mimics roughly the world conditions.Environment, agriculture, carbon sequestration, Kyoto Protocol, optimal control.

Estimating the costs of atmospheric carbon reductions in Mexico

Trading in carbon emissions is a means of ensuring that supplies with the lowest marginal costs of emissions reduction are commissioned first. To analyse the potential for Mexican suppliers to participate in an emissions trading market, the relative cost-effectiveness of a carbon sequestration project and carbon abatement project is assessed. The marginal costs of emission reductions for each project are estimated and compared using standardised data. The results show that the carbon sequestration project has lower marginal costs for carbon emissions reductions than the technology-based abatement. Factors such as timescale, discounting implementation costs, transaction costs, and technical assumptions are considered in this comparison. The high transaction costs to set up carbon sequestration projects and weak institutional capacity to monitor and enforce agreements are relevant factors. Even though the carbon sequestration project is more cost-effective than the renewable energy power plant, both projects may allow Mexican suppliers to enter a potential international carbon emissions trading market depending on demand and supply conditions and the rules of the market

Contract Design to Sequester Carbon in Agricultural Soils

According to several studies, agricultural carbon sequestration could be a relatively low cost opportunity to mitigate greenhouse gas (GHG) concentration and a promising means that could be institutionalised. However the potential for additional carbon quantities in agricultural soils is critical and comes from the agricultural firms behaviour with regards to land heterogeneity. In this paper, our aim is to set incentive mechanisms to enhance carbon sequestration by agricultural firms. A policymaker has to arrange incentives as agricultural firms have private information and do not spontaneously switch to the required practices. Moreover, a novelty in our paper is to show that the potential for additional carbon sequestration is similar to an exhaustible resource. As a result, we construct an intertemporal principal-agent model with adverse selection. Our contribution is to specify contracts in order to induce truthful revelation by the firms regarding their intrinsic characteristics towards carbon sequestration, while analytically characterizing the optimal path to sequester carbon as an exhaustible resource.Adverse selection ; agriculture ; carbon sequestration ; incentives ; land-use

Producer Preference for Land-Based Biological Carbon Sequestration in Agriculture: An Economic Inquiry

This study was intended to develop an understanding of producer preference for land-based carbon sequestration in agriculture. We conducted a mail survey to elicit producer choice to provide marketable carbon offsets by participating in different carbon credit programs characterized by varying practices. Based on a quantitative analysis, we found that: 1) the market price for carbon offsets could increase producer participation in carbon sequestration; 2) producers perceived differentially different but correlated private costs for adopting carbon sequestering practices, depending on production attributes; and 3) relatively high carbon prices would be needed to stimulate producer provision of carbon offsets by land-based carbon sequestration activities. A simulation of producer choice with agricultural census data estimated potential carbon offsets supply in the Northern Great Plains region. This study contributes to the economic understanding of agricultural potential for greenhouse gas mitigation.greenhouse gas, carbon sequestration, producer stated preferences, agriculture, economics, carbon offsets, carbon markets, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Resource /Energy Economics and Policy, Q54, Q52, Q58,

Forestry Sequestration of CO2 and Markets for Timber

Forestry has been considered to have potential in reducing the atmospheric concentration of carbon dioxide by sequestrating carbon in above-ground timber and below-ground roots and soil. This potential has been noted in the Kyoto Protocol, which identified specific forestry activities for which carbon sequestration credits could be obtained. To date, a few forestry efforts have been undertaken for carbon purposes, but most of these efforts have been on a small scale. Proposals have been under discussion, however, that would result in the creation of very large areas of new forest for the purpose of offsetting some of the additional carbon that is being released into the atmosphere. Concerns are expressed, however, that large-scale sequestration operations might have impacts on the world timber market, affecting timber prices and thereby reducing the incentives of traditional suppliers to invest in forest management and new timber production. Such a "crowding out" or "leakage" effect, as it is called in the literature, could negate much or all of the sequestered carbon by the newly created sequestration forests. Accordingly, the purpose of this study is to examine and assess the interactions between carbon sequestration forestry, particularly, newly created carbon forests, and the markets for timber. The approach of this study involves utilizing an existing Dynamic Timber Supply Model (DTSM) to examine the interactions between newly created sequestration forests and the markets for timber. This model has been used to examine global timber supply and, more recently, has been modified to include carbon considerations. This study suggests that even without any specific sequestration efforts, commercial forestry offers the potential to sequester substantial volumes of carbon, approaching ten gigatons (Gt) (or petagrams (Pg)), in vegetation, soils and market products over the next century. At current rates of atmospheric carbon build up this is equal to about three years of net carbon releases into the atmosphere. This volume of carbon sequestration could be increased 50–100% by 50 million hectares (ha) of rapidly growing carbon-sequestering plantation forests, even given the anticipated leakages due to market price effects. Finally, the projections suggest that the amount of crowding out and carbon leakages are likely to be very modest. The 50 million ha of carbon plantations are projected to reduce land areas in industrial plantations, that is, crowd out, only from 0.2 to 7.8 million ha over the 100-year period. The addition of carbon sequestration forests offers the potential to increase the carbon sequestration of the forest system more than 50%, up to 5.7 Gts, above that already captured from market activity. This estimate assumes that crowding out and associated projected leakages will occur. At current rates of atmospheric carbon buildup, about 2.8% of the expected total buildup in atmospheric carbon over the next century could be offset by 50 million ha of carbon plantations.

Modeling the Effects of Cap and Trade and a Carbon Offset Policy on Crop Allocations and Farm Income

A static, producer profit maximization framework is used to capture county level land use choice on the basis of profitability, greenhouse gas (GHG) emissions to the farm gate as well as soil carbon sequestration as affected by tillage and soil type. Policy scenarios of a 5% GHG cap on agricultural emissions in conjunction with a carbon offset payment system, designed to provide producer payments for net carbon footprint (GHG emissions – soil carbon sequestration) reductions compared to a baseline are evaluated to determine potential changes to land use and or producer income as a result of different policy scenarios. Results suggest that a policy solely targeted at emissions can be counterproductive in the sense that acreage reductions of more input-intensive crops also lead to soil carbon sequestration reductions. Producer income effects are largely negative unless carbon prices reach nearly $100 per ton.Cap and Trade, Carbon Sequestration, GHG Emissions, Agriculture, Agricultural and Food Policy, Environmental Economics and Policy, Q50, Q58, Q54,

OCEAN CARBON SINKS AND INTERNATIONAL CLIMATE POLICY

Terrestrial sinks have entered the Kyoto Protocol as offsets for carbon sequestration, but ocean sinks have escaped attention. Ocean sinks are as unexplored and uncertain as were the terrestrial sinks at the time of negotiation. It is not unlikely that certain countries will advocate the inclusion of ocean carbon sinks to reduce their emission reduction obligations. We use a simple model of the international market for carbon dioxide emissions to evaluate who would gain or loose from allowing for ocean carbon sinks. Our analysis is restricted to information on anthropogenic carbon sequestration within the exclusive economic zone of a country. Like the carbon sequestration of business as usual forest management activities, natural ocean carbon sequestration applies at zero costs. The total amount of anthropogenic ocean carbon sequestration is large, also in the exclusive economic zones. As a consequence, it substantially alters the costs of emission reduction for most countries. Countries such as Australia, Denmark, France, Iceland, New Zealand, Norway and Portugal would gain substantially, and a large number of countries would benefit too. Current net exporters of carbon permits, particularly Russia, would gain less and oppose the inclusion of carbon sinks.carbon dioxide emission reduction, emission permit trade, exclusive economic zones, ocean sinks

Forest Carbon Sequestration: Some Issues for Forest Investments

A major problem being faced by human society is that the global temperature is believed to be rising due to human activity that releases carbon dioxide to the atmosphere, i.e., global warming. The major culprit is thought to be fossil fuel burning, which is releasing increasing amounts of carbon dioxide in the atmosphere. The problem of increasing atmospheric carbon dioxide can be addressed a number of ways. One of these is forestry and forest management. This paper examines a number of current issues related to mitigating the global warming problem through forestry. First, the overall carbon cycle is described, and the potential impact of forests on the buildup of atmospheric carbon is examined. A major focus is the means by which forests and forest management can contribute to the sequestration of carbon. The potential role of forests and forestry in sequestrating carbon to reduce the buildup of greenhouse gases in the atmosphere is now well recognized. A number of alternative approaches to utilizing forestry and forest management for carbon sequestration are examined. These include forest protection; the management of forests for carbon for joint products, i.e., the management of forests to generate both carbon and timber as products; the establishment of plantation forests dedicated to carbon sequestration; and increased production of wood products. Replacing other materials with wood will sequester carbon while reducing energy requirements, thereby reducing carbon emissions. Studies examining the costs of carbon sequestration using forestry are also discussed. The recent Kyoto Protocol (K.P.) explicitly recognizes certain forestry activities as “certifiable” for sequestration credits. But some definitions and aspects of carbon sequestration through forestry were left incomplete or inadequately defined by the Protocol. Furthermore, the KP has changed due to the recent withdrawal of the US for the Protocol (although not from the Kyoto Process). Nevertheless, further clarification is necessary to understand the full potential and set of opportunities from forestry both within the framework of the Protocol and more generally. Alternative types of vehicles for sequestration credits are discussed below,m both within and outside the context of the KP , and their advantages and disadvantages in terms of periods covered and liability are also examined. Finally, some ongoing real-world activities utilizing forestry specifically to sequester carbon are discussed.forests, carbon, sinks, sequestration, forest management, Kyoto Protocol

Modeling carbon biogeochemistry in agricultural soils

An existing model of C and N dynamics in soils was supplemented with a plant growth submodel and cropping practice routines (fertilization, irrigation, tillage, crop rotation, and manure amendments) to study the biogeochemistry of soil carbon in arable lands. The new model was validated against field results for short-term (1–9 years) decomposition experiments, the seasonal pattern of soil CO2 respiration, and long-term (100 years) soil carbon storage dynamics. A series of sensitivity runs investigated the impact of varying agricultural practices on soil organic carbon (SOC) sequestration. The tests were simulated for corn (maize) plots over a range of soil and climate conditions typical of the United States. The largest carbon sequestration occurred with manure additions; the results were very sensitive to soil texture (more clay led to greater sequestration). Increased N fertilization generally enhanced carbon sequestration, but the results were sensitive to soil texture, initial soil carbon content, and annual precipitation. Reduced tillage also generally (but not always) increased SOC content, though the results were very sensitive to soil texture, initial SOC content, and annual precipitation. A series of long-term simulations investigated the SOC equilibrium for various agricultural practices, soil and climate conditions, and crop rotations. Equilibrium SOC content increased with decreasing temperatures, increasing clay content, enhanced N fertilization, manure amendments, and crops with higher residue yield. Time to equilibrium appears to be one hundred to several hundred years. In all cases, equilibration time was longer for increasing SOC content than for decreasing SOC content. Efforts to enhance carbon sequestration in agricultural soils would do well to focus on those specific areas and agricultural practices with the greatest potential for increasing soil carbon content