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Ecosystem Services under Benefit and Cost Uncertainty: An Application to Soil Carbon Sequestration

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  • Sergey S. Rabotyagov

Abstract

Benefit and cost uncertainty in provisioning of ecosystem services are investigated in the context of soil carbon sequestration. Multiple parcel-level carbon sequestration options are considered. Uncertainty has been a widely stated reason for not including soil carbon sequestration in the portfolio of greenhouse gases reduction measures. Biophysical simulation models are used to generate a distribution of resulting environmental benefits. An econometric model of conservation practice adoption is used to generate a distribution of costs. The results provide a magnitude of uncertainty discount for soil carbon offsets and the budget margin of safety, and may assist in formulating carbon sequestration policy.

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  • Sergey S. Rabotyagov, 2010. "Ecosystem Services under Benefit and Cost Uncertainty: An Application to Soil Carbon Sequestration," Land Economics, University of Wisconsin Press, vol. 86(4), pages 668-686.
    • Handle: RePEc:uwp:landec:v:86:y:2010:iv:1:p:668-686
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    3. Sergey S. Rabotyagov & Adriana M. Valcu-Lisman & Catherine L. Kling, 2016. "Resilient Provision of Ecosystem Services from Agricultural Landscapes: Trade-offs Involving Means and Variances of Water Quality Improvements," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1295-1313.
    4. Susan Stratton Sayre, 2019. "Pay for the Option to Pay? The Impact of Improved Scientific Information on Payments for Ecosystem Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 591-625, June.
    5. Rabotyagov, Sergey S. & Valcu, Adriana M. & Campbell, Todd D. & Jha, Manoj K. & Gassman, Philip W. & Kling, Catherine L., 2012. "Using a coupled simulation-optimization approach to design cost-effective reverse auctions for watershed nutrient reductions," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124656, Agricultural and Applied Economics Association.
    6. Springborn, Michael & Yeo, Boon-Ling & Lee, Juhwan & Six, Johan, 2013. "Crediting uncertain ecosystem services in a market," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 554-572.

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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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