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The Consequences of Cobenefits for the Efficient Design of Carbon Sequestration Programs

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  • Hongli Feng
  • Catherine L. Kling

Abstract

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. Dans le présent article, nous avons examiné l'efficacité sociale des marchés privés d'échange de droits d'émission de carbone y compris les échanges liés à la séquestration du carbone dans les sols agricoles lorsqu'il y a des avantages accessoires considérables (effets favorables sur l'environnement) associés aux pratiques qui permettent de séquestrer le carbone. Nous avons également analysé l'efficacité des programmes de conservation administrés par le gouvernement et conçus pour promouvoir diverses caractéristiques environnementales (dont la séquestration du carbone et ses avantages accessoires) pour l'offre du carbone. Finalement, nous avons examiné les problèmes de conception et d'efficacité des politiques en présence d'interaction entre un marché privé d'échange de droits d'émission de carbone et un programme de conservation administré par le gouvernement. Des analyses empiriques dans le cas d'une région qui représente une source considérable de séquestration du carbone et d'avantages accessoires ont illustré l'importance et la complexité des problèmes liés à la conception de politiques.

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  • Hongli Feng & Catherine L. Kling, 2005. "The Consequences of Cobenefits for the Efficient Design of Carbon Sequestration Programs," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 461-476, December.
    • Handle: RePEc:bla:canjag:v:53:y:2005:i:4:p:461-476
    DOI: 10.1111/j.1744-7976.2005.00030.x
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    1. Hongli Feng & Lyubov A. Kurkalova & Catherine L. Kling & Philip W. Gassman, 2004. "Environmental Conservation in Agriculture: Land Retirement versus Changing Practices on Working Land," Center for Agricultural and Rural Development (CARD) Publications 04-wp365, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Feng, Hongli & Zhao, Jinhua & Kling, Catherine L., 2002. "Time Path and Implementation of Carbon Sequestration (The)," Staff General Research Papers Archive 5068, Iowa State University, Department of Economics.
    3. Feng, Hongli, 2005. "The dynamics of carbon sequestration and alternative carbon accounting, with an application to the upper Mississippi River Basin," Ecological Economics, Elsevier, vol. 54(1), pages 23-35, July.
    4. Roger A. Sedjo & Gregg Marland, 2003. "Inter-trading permanent emissions credits and rented temporary carbon emissions offsets: some issues and alternatives," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 435-444, December.
    5. Burtraw, Dallas & Krupnick, Alan & Palmer, Karen & Paul, Anthony & Toman, Michael & Bloyd, Cary, 2003. "Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 650-673, May.
    6. Butt, Tanveer A. & McCarl, Bruce A., 2004. "Farm and Forest Carbon Sequestration: Can Producers Employ it to Make Some Money?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 19(3), pages 1-6.
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    1. Alejandro Caparrós & Emilio Cerdá & Paola Ovando & Pablo Campos, 2010. "Carbon Sequestration with Reforestations and Biodiversity-scenic Values," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 49-72, January.
    2. Shrestha, Shailesh & Glenk, Klaus, 2016. "A farm level approach to explore economic trade offs of soil organic carbon management in Scottish crop farms," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236363, Agricultural Economics Society.
    3. Garnache, Cloe & Merel, Pierre R., 2012. "Carbon market policy design: Investigating the role of payments aggregation," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124960, Agricultural and Applied Economics Association.
    4. Rodríguez-Entrena, Macario & Espinosa-Goded, María & Barreiro-Hurlé, Jesús, 2014. "The role of ancillary benefits on the value of agricultural soils carbon sequestration programmes: Evidence from a latent class approach to Andalusian olive groves," Ecological Economics, Elsevier, vol. 99(C), pages 63-73.
    5. Glenk, Klaus & Shrestha, Shailesh & Topp, Cairstiona F.E. & Sánchez, Berta & Iglesias, Ana & Dibari, Camilla & Merante, Paolo, 2017. "A farm level approach to explore farm gross margin effects of soil organic carbon management," Agricultural Systems, Elsevier, vol. 151(C), pages 33-46.
    6. Majeed, Fahd & Khanna, Madhu & Miao, Ruiqing & Blanc, Elena & Hudiburg, Tara & DeLucia, Evan, 2020. "Designing payments for GHG mitigation to induce low carbon bioenergy production," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304394, Agricultural and Applied Economics Association.
    7. Heberling, Matthew T. & García, Jorge H. & Thurston, Hale W., 2010. "Does encouraging the use of wetlands in water quality trading programs make economic sense?," Ecological Economics, Elsevier, vol. 69(10), pages 1988-1994, August.
    8. Neuman, Amber D. & Belcher, Ken W., 2011. "The contribution of carbon-based payments to wetland conservation compensation on agricultural landscapes," Agricultural Systems, Elsevier, vol. 104(1), pages 75-81, January.
    9. Kovacs, Kent F. & Haight, Robert G. & Jung, Suhyun & Locke, Dexter H. & O'Neil-Dunne, Jarlath, 2013. "The marginal cost of carbon abatement from planting street trees in New York City," Ecological Economics, Elsevier, vol. 95(C), pages 1-10.
    10. Li, Zhi & Liu, Pengfei & Swallow, Stephen K., 2022. "The performance of multi-type environmental credit trading markets: Lab experiment evidence," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).

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