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Carbon Offsets

Author

Listed:
  • Elizabeth A. Wilman
  • Mahen S. Mahendrarajah

Abstract

The Kyoto Protocol allows countries to credit their greenhouse gas inventory with the emissions captured from afforestation or reforestation, providing the potential for carbon polluters to pay tree planters to store carbon. Trades of sequestration services are complicated because of growing time and monitoring difficulties. A delayed-response, optimal-control model, considering both sequestration and emission reduction possibilities, is developed. The aim is to clarify the good that is being traded, and the role that time plays in defining the good, and the nature of related transactions. In general, principalagent contracts, rather than arms-length trades, would be expected.

Suggested Citation

  • Elizabeth A. Wilman & Mahen S. Mahendrarajah, 2002. "Carbon Offsets," Land Economics, University of Wisconsin Press, vol. 78(3), pages 405-416.
    • Handle: RePEc:uwp:landec:v:78:y:2002:i:3:p:405-416
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    References listed on IDEAS

    as
    1. De Bondt, Raymond R, 1976. "Limit Pricing, Uncertain Entry, and the Entry Lag," Econometrica, Econometric Society, vol. 44(5), pages 939-946, September.
    2. Heaps, Terry & Neher, Philip A., 1979. "The economics of forestry when the rate of harvest is constrained," Journal of Environmental Economics and Management, Elsevier, vol. 6(4), pages 297-319, December.
    3. G. Cornelis van Kooten & Clark S. Binkley & Gregg Delcourt, 1995. "Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 365-374.
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    Cited by:

    1. Brian R. Copeland & M. Scott Taylor, 2017. "Environmental and resource economics: A Canadian retrospective," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1381-1413, December.
    2. Shaheen, Susan A. & Bejamin-Chung, Jade & Allen, Denise & Howe-Steiger, Linda, 2009. "Achieving California’s Land Use and Transportation Greenhouse Gas Emission Targets Under AB 32: An Exploration of Potential Policy Processes and Mechanisms," Institute of Transportation Studies, Working Paper Series qt8bm4t7w5, Institute of Transportation Studies, UC Davis.
    3. Olschewski, Roland & Benítez, Pablo C. & de Koning, G.H.J. & Schlichter, Tomás, 2005. "How attractive are forest carbon sinks? Economic insights into supply and demand of Certified Emission Reductions," Journal of Forest Economics, Elsevier, vol. 11(2), pages 77-94, September.

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    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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