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Carbon markets, transaction costs and bioenergy

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  • Cacho, Oscar J.

Abstract

Payment for carbon sequestration by agriculture and forestry can provide incentives for adoption of sustainable agricultural practices. However, a project involving contracts with farmers may face high transaction costs in showing that net emission reductions are real and attributable to the project. This paper presents a model of project participation that includes transaction and abatement costs. A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the design of a climate mitigation program may affect the feasibility of actual projects.

Suggested Citation

  • Cacho, Oscar J., 2008. "Carbon markets, transaction costs and bioenergy," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6007, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare08:6007
    DOI: 10.22004/ag.econ.6007
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    File URL: https://ageconsearch.umn.edu/record/6007/files/cp08ca02.pdf
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    References listed on IDEAS

    as
    1. Franck Lecocq & Karan Capoor, "undated". "State and Trends of the Carbon Market 2003," World Bank Publications - Reports 13416, The World Bank Group.
    2. repec:wbk:wboper:13408 is not listed on IDEAS
    3. Oscar Cacho & Leslie Lipper, 2006. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Working Papers 06-13, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    4. John M. Antle & Roberto O. Valdivia, 2006. "Modelling the supply of ecosystem services from agriculture: a minimum‐data approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 1-15, March.
    5. Oscar J. Cacho & Robyn L. Hean & Russell M. Wise, 2003. "Carbon‐accounting methods and reforestation incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), pages 153-179, June.
    6. Cacho, Oscar & Lipper, Leslie, 2006. "Abatement and transaction costs of carbon-sink projects involving smallholders," ESA Working Papers 289054, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    7. Cacho, Oscar J. & Marshall, Graham R. & Milne, Mary, 2003. "Smallholder agroforestry projects: Potential for carbon sequestration and poverty alleviation," ESA Working Papers 289093, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    8. Franck Lecocq, 2005. "State and Trends of the Carbon Market—2004," World Bank Publications - Books, The World Bank Group, number 7457.
    9. Oscar Cacho & Russell Wise & Kenneth MacDicken, 2004. "Carbon Monitoring Costs and their Effect on Incentives to Sequester Carbon through Forestry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 9(3), pages 273-293, July.
    10. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2006," World Bank Publications - Reports 13409, The World Bank Group.
    11. Cacho, Oscar J. & Marshall, Graham R. & Milne, Mary, 2005. "Transaction and abatement costs of carbon-sink projects in developing countries," Environment and Development Economics, Cambridge University Press, vol. 10(5), pages 597-614, October.
    12. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2007," World Bank Publications - Reports 13407, The World Bank Group.
    13. repec:wbk:wboper:13406 is not listed on IDEAS
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    Cited by:

    1. John F. Raffensperger, 2020. "A price on warming with a supply chain directed market," Papers 2003.05114, arXiv.org, revised Mar 2021.

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