IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v124y2014i3p677-690.html
   My bibliography  Save this article

Accounting for uncertainties and time preference in economic analysis of tackling climate change through forestry and selected policy implications for Scotland and Ukraine

Author

Listed:
  • Maria Nijnik
  • Guillaume Pajot

Abstract

The paper discusses the development of economic techniques for dealing with uncertainties in economic analysis of planting trees to mitigate climatic change. In consideration of uncertainty, time preference and intergenerational equity, the traditional cost-benefit analysis framework is challenged with regard to the discounting/non-discounting of carbon uptake benefits, and because it usually uses a constant and positive discount rate. We investigate the influence of various discounting protocols on the outputs of economic analysis. The idea of using the declining discount rate is also considered. Several numerical examples dealing with the analysis of afforestation for carbon sequestration in Scotland and Ukraine are provided. We show that the choice of discounting protocols have a considerable influence on the results of economic analysis, and therefore, on the decision-making processes related to climate change mitigation strategies. The paper concludes with some innovative insights on accounting for uncertainties and time preference in tackling climate change through forestry, several climate policy implications of dealing with uncertainties, and a brief discussion of what the use of different discounting protocols might imply for decision making. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Maria Nijnik & Guillaume Pajot, 2014. "Accounting for uncertainties and time preference in economic analysis of tackling climate change through forestry and selected policy implications for Scotland and Ukraine," Climatic Change, Springer, vol. 124(3), pages 677-690, June.
    • Handle: RePEc:spr:climat:v:124:y:2014:i:3:p:677-690
    DOI: 10.1007/s10584-014-1076-5
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10584-014-1076-5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10584-014-1076-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. van Kooten, G. Cornelis & Sohngen, Brent, 2007. "Economics of Forest Ecosystem Carbon Sinks: A Review," International Review of Environmental and Resource Economics, now publishers, vol. 1(3), pages 237-269, September.
    2. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    3. Kenneth M. Chomitz, 2002. "Baseline, leakage and measurement issues: how do forestry and energy projects compare?," Climate Policy, Taylor & Francis Journals, vol. 2(1), pages 35-49, March.
    4. Nick Hanley & Clive L. Spash, 1993. "Cost–Benefit Analysis and the Environment," Books, Edward Elgar Publishing, number 205.
    5. van Kooten, G. Cornelis & Eagle, Alison J. & Manley, James G. & Smolak, Tara M., 2004. "How Costly Are Carbon Offsets? A Meta-Analysis Of Carbon Forest Sinks," Working Papers 18166, University of Victoria, Resource Economics and Policy.
    6. Nijnik, Maria & Bizikova, Livia, 2008. "Responding to the Kyoto Protocol through forestry: A comparison of opportunities for several countries in Europe," Forest Policy and Economics, Elsevier, vol. 10(4), pages 257-269, February.
    7. Newell, Richard G. & Stavins, Robert N., 2000. "Climate Change and Forest Sinks: Factors Affecting the Costs of Carbon Sequestration," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 211-235, November.
    8. H. Böttcher & A. Freibauer & Y. Scholz & V. Gitz & Philippe Ciais & M. Mund & T. Wutzler & E.-D. Schulze, 2012. "Setting priorities for land management to mitigate climate change," Post-Print hal-00716172, HAL.
    9. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, December.
    10. S. v. Ciriacy-Wantrup, 1942. "Private Enterprise and Conservation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 75-96.
    11. Nijnik, Maria, 2004. "To an economist's perception on sustainability in forestry-in-transition," Forest Policy and Economics, Elsevier, vol. 6(3-4), pages 403-413, June.
    12. G. C. van Kooten, 2004. "Climate Change Economics," Books, Edward Elgar Publishing, number 3424.
    13. Brainard, Julii & Bateman, Ian J. & Lovett, Andrew A., 2009. "The social value of carbon sequestered in Great Britain's woodlands," Ecological Economics, Elsevier, vol. 68(4), pages 1257-1267, February.
    14. G. Cornelis van Kooten & Alison Eagle & James Manley & Tara Smolak, 2004. "How Costly are Carbon Offsets? A Meta-Analysis of Forest Carbon Sinks," Working Papers 2004-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    15. Li, Chuan-Zhong & Lofgren, Karl-Gustaf, 2000. "Renewable Resources and Economic Sustainability: A Dynamic Analysis with Heterogeneous Time Preferences," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 236-250, November.
    16. Moran, Dominic & MacLeod, Michael J. & Wall, Eileen & Eory, Vera & McVittie, Alistair & Barnes, Andrew Peter & Rees, Bob & Smith, Peter & Moxey, Andrew, 2009. "Marginal abatement cost curves for UK agriculture, forestry, land-use and land-use change sector out to 2022," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51065, Agricultural Economics Society.
    17. Hepburn, Cameron J. & Koundouri, Phoebe, 2007. "Recent advances in discounting: Implications for forest economics," Journal of Forest Economics, Elsevier, vol. 13(2-3), pages 169-189, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. van Kooten, G. Cornelis & Nijnik, Maria & Bradford, Kimpton, 2019. "Can carbon accounting promote economic development in forest-dependent, indigenous communities?," Forest Policy and Economics, Elsevier, vol. 100(C), pages 68-74.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nijnik, Maria & Pajot, Guillaume & Moffat, Andy J. & Slee, Bill, 2013. "An economic analysis of the establishment of forest plantations in the United Kingdom to mitigate climatic change," Forest Policy and Economics, Elsevier, vol. 26(C), pages 34-42.
    2. Nijnik, Maria & Bizikova, Livia, 2008. "Responding to the Kyoto Protocol through forestry: A comparison of opportunities for several countries in Europe," Forest Policy and Economics, Elsevier, vol. 10(4), pages 257-269, February.
    3. van Kooten, G. Cornelis & Sohngen, Brent, 2007. "Economics of Forest Ecosystem Carbon Sinks: A Review," International Review of Environmental and Resource Economics, now publishers, vol. 1(3), pages 237-269, September.
    4. Vermont, Bruno & De Cara, Stéphane, 2010. "How costly is mitigation of non-CO2 greenhouse gas emissions from agriculture?: A meta-analysis," Ecological Economics, Elsevier, vol. 69(7), pages 1373-1386, May.
    5. Im, Eun Ho & Adams, Darius M. & Latta, Gregory S., 2007. "Potential impacts of carbon taxes on carbon flux in western Oregon private forests," Forest Policy and Economics, Elsevier, vol. 9(8), pages 1006-1017, May.
    6. Monge, Juan J. & Bryant, Henry L. & Gan, Jianbang & Richardson, James W., 2016. "Land use and general equilibrium implications of a forest-based carbon sequestration policy in the United States," Ecological Economics, Elsevier, vol. 127(C), pages 102-120.
    7. van Kooten, G. Cornelis, 2004. "Economics of Forest and Agricultural Carbon Sinks," Working Papers 18160, University of Victoria, Resource Economics and Policy.
    8. Marshall, Liz & Kelly, Alexia, 2010. "The Time Value of Carbon and Carbon Storage: Clarifying the terms and the policy implications of the debate," MPRA Paper 27326, University Library of Munich, Germany.
    9. Pajot, Guillaume, 2011. "Rewarding carbon sequestration in South-Western French forests: A costly operation?," Journal of Forest Economics, Elsevier, vol. 17(4), pages 363-377.
    10. van Kooten, G. Cornelis & Laaksonen-Craig, Susanna & Wang, Yichuan, 2007. "Costs of Creating Carbon Offset Credits via Forestry Activities: A Meta-Regression Analysis," Working Papers 37039, University of Victoria, Resource Economics and Policy.
    11. G. Cornelis van Kooten, 2008. "Biological Carbon Sinks: Transaction Costs and Governance," Working Papers 2008-12, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    12. Munnich Vass, Miriam & Elofsson, Katarina, 2013. "Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050?," Working Paper Series 2013:9, Swedish University of Agricultural Sciences, Department Economics.
    13. David Walker, 2014. "The Economic Potential for Forest-Based Carbon Sequestration under Different Emissions Targets and Accounting Schemes," Working Papers 2014.02, School of Economics, La Trobe University.
    14. Caetano, Marco Antonio Leonel & Gherardi, Douglas Francisco Marcolino & Yoneyama, Takashi, 2013. "A constraint satisfaction method applied to the problem of controlling the CO2 emission in the Legal Brazilian Amazon," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(21), pages 5322-5329.
    15. Latta, Gregory S. & Adams, Darius M. & Bell, Kathleen P. & Kline, Jeffrey D., 2016. "Evaluating land-use and private forest management responses to a potential forest carbon offset sales program in western Oregon (USA)," Forest Policy and Economics, Elsevier, vol. 65(C), pages 1-8.
    16. Lubowski, Ruben N. & Plantinga, Andrew J. & Stavins, Robert N., 2006. "Land-use change and carbon sinks: Econometric estimation of the carbon sequestration supply function," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 135-152, March.
    17. Rosenberger, Randall S. & Stanley, Tom D., 2006. "Measurement, generalization, and publication: Sources of error in benefit transfers and their management," Ecological Economics, Elsevier, vol. 60(2), pages 372-378, December.
    18. Zandersen, Marianne & Tol, Richard S.J., 2009. "A meta-analysis of forest recreation values in Europe," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 109-130, January.
    19. Sebri, Maamar, 2015. "Use renewables to be cleaner: Meta-analysis of the renewable energy consumption–economic growth nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 657-665.
    20. Shaikh, Sabina L. & Sun, Lili & van Kooten, G. Cornelis, 2005. "Are Agricultural Values a Reliable Guide in Determining Landowners’ Decisions to Create Carbon Forest Sinks?," Working Papers 37017, University of Victoria, Resource Economics and Policy.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:124:y:2014:i:3:p:677-690. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.