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Carbon offsets and agriculture: Options, obstacles, and opinions

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  • G. Cornelis van Kooten
  • Rebecca Zanello

Abstract

While carbon offsets in agriculture can play a role in addressing climate change, they are not a perfect substitute for direct emission reductions. As shown in this paper through various arguments and case studies, climate policies in Canada have avoided the use of offsets to be sold in carbon markets, preferring instead to incentivize adoption of best management practices (BMPs) that provide environmental benefits along with climate mitigation benefits. We argue that this is a preferred policy option due to the perils and pitfalls inherent in the measurement and monitoring required to identify offset credits. While an appropriate approach might be to penalize Canadian farmers for any emissions their activities cause, this may do more harm than good. Canadian agricultural production is highly efficient and technologically advanced; therefore, reductions in Canada's contribution to the global food supply will result in less‐efficient production occurring elsewhere (i.e., leakage) that increases global greenhouse gas emissions. Même si les compensations de carbone dans l'agriculture peuvent jouer un rôle dans la lutte contre le changement climatique, elles ne constituent pas un substitut parfait aux réductions directes des émissions. Comme le montre cet article à travers divers arguments et études de cas, les politiques climatiques au Canada ont évité le recours aux compensations destinées à être vendues sur les marchés du carbone, préférant plutôt encourager l'adoption de meilleures pratiques de gestion (BPG) qui procurent des avantages environnementaux ainsi que des avantages en matière d'atténuation du climat. Nous soutenons qu'il s'agit d'une option politique privilégiée en raison des périls et des pièges inhérents à la mesure et au suivi requis pour identifier les crédits compensatoires. Bien qu'une approche appropriée pourrait consister à pénaliser les agriculteurs canadiens pour les émissions causées par leurs activités, cela pourrait faire plus de mal que de bien. La production agricole canadienne est très efficace et technologiquement avancée. Par conséquent, la réduction de la contribution du Canada à l'approvisionnement alimentaire mondial entraînera une production moins efficace ailleurs (c'est‐à‐dire des fuites), ce qui augmentera les émissions mondiales de gaz à effet de serre.

Suggested Citation

  • G. Cornelis van Kooten & Rebecca Zanello, 2023. "Carbon offsets and agriculture: Options, obstacles, and opinions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(3-4), pages 375-391, September.
  • Handle: RePEc:bla:canjag:v:71:y:2023:i:3-4:p:375-391
    DOI: 10.1111/cjag.12340
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    References listed on IDEAS

    as
    1. van Kooten, G. Cornelis, 2017. "Forest carbon offsets and carbon emissions trading: Problems of contracting," Forest Policy and Economics, Elsevier, vol. 75(C), pages 83-88.
    2. Janssen, Larry & Hamda, Yonas, 2009. "Economic Analysis of SODSAVER Provision of the 2008 Farm Bill for South Dakota," Economics Staff Papers 56776, South Dakota State University, Department of Economics.
    3. Woodward, Richard T., 2011. "Double-dipping in environmental markets," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 153-169, March.
    4. G. Cornelis van Kooten, 2023. "Determining optimal forest rotation ages and carbon offset credits: Accounting for post‐harvest carbon storehouses," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(2), pages 255-272, June.
    5. Fredrik Carlsson & Christina Gravert & Olof Johansson-Stenman & Verena Kurz, 2021. "The Use of Green Nudges as an Environmental Policy Instrument," Review of Environmental Economics and Policy, University of Chicago Press, vol. 15(2), pages 216-237.
    6. Janssen, Larry & Hamda, Yonas, 2009. "Economic Analysis of SODSAVER Provision of the 2008 Farm Bill for South Dakota," Economics Staff Papers 56776, South Dakota State University, Department of Economics.
    7. G. Cornelis Kooten & Brad Stennes & Erwin H. Bulte, 2001. "Cattle and Wildlife Competition for Forage: Budget Versus Bioeconomic Analyses of Public Range Improvements in British Columbia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 49(1), pages 71-86, March.
    8. Tiago A. Siqueira & Rodrigo S. Iglesias & J. Marcelo Ketzer, 2017. "Carbon dioxide injection in carbonate reservoirs – a review of CO 2 ‐water‐rock interaction studies," Greenhouse Gases: Science and Technology, Blackwell Publishing, vol. 7(5), pages 802-816, October.
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