Advanced Search
MyIDEAS: Login to save this article or follow this journal

An Economic Analysis of the Potential Influence of Carbon Credits on Farm Management Practices


Author Info

  • Weersink, Alfons
  • Joseph, Stanley
  • Kay, Beverly D.
  • Turvey, Calum G.


The objective of the 1997 Kyoto agreement was to limit greenhouse gas (GHG) emissions among signatory countries and thereby slow global warming. Under the agreement, Canada has committed itself to reduce GHGs over the next decade by 6 percent from estimated 1990 levels. Debate has now begun on the appropriate government policies that will induce the desired GHG reductions. Regulations could be in the form of direct controls or economic incentives, such as a subsidy/tax system or an emission trading system. The success of the U.S. emission market for SO2 (Schmalenseeet al., 1998) has generated growing interest in the use of a similar market mechanism for carbon (Holmes and Friedman, 2000). The existence of a carbon credit market presents the agricultural sector with another potential revenue source (Sandor and Skees, 1999). While agriculture contributes approximately 10 percent of Canada’s greenhouse gas emissions, it also has the potential to sequester carbon through strategies such as zero tillage, reduced summer fallow and improved grazing. These sequestration activities could be incorporated into an emission trading system and create a “carbon credit†for each unit of CO2 that is removed from the atmosphere. Firms with high emission reduction costs could then buy these credits rather than bear the large abatement costs associated with reducing their GHG emission levels. The perception is that the marginal cost of abatement for agriculture is less than that for other sectors (McCarl and Schneider, 2000). Thus, farmers may be able to profit by selling credits for activities that sequester carbon. An example of such a transaction was the purchase of carbon credits from Iowa farmers who adopted no-till by a consortium of Canadian energy companies (GEMCO) (Lessiter, 1999). Whether the development of a carbon credit market will affect the management decisions of an Ontario crop farmer isthe focus of this study.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

Bibliographic Info

Article provided by Canadian Agricultural Economics Society in its journal CAFRI: Current Agriculture, Food and Resource Issues.

Volume (Year): (2003)
Issue (Month): 04 ()

as in new window
Handle: RePEc:ags:cafric:45728

Contact details of provider:
Web page:
More information through EDIRC

Related research

Keywords: Agricultural and Food Policy; Farm Management;


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kulshreshtha, S. N. & Junkins, B. & Desjardins, R., 2000. "Prioritizing greenhouse gas emission mitigation measures for agriculture," Agricultural Systems, Elsevier, vol. 66(3), pages 145-166, December.
  2. Antle, John M. & Capalbo, Susan M. & Mooney, Sian & Elliott, Edward T. & Paustian, Keith H., 2001. "Economic Analysis Of Agricultural Soil Carbon Sequestration: An Integrated Assessment Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
  3. RICHARD M. Adams & DARIUS M. Adams & JOHN M. Callaway & CHING-CHENG Chang & BRUCE A. Mccarl, 1993. "Sequestering Carbon On Agricultural Land: Social Cost And Impacts On Timber Markets," Contemporary Economic Policy, Western Economic Association International, vol. 11(1), pages 76-87, 01.
Full references (including those not matched with items on IDEAS)


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

Cited by:
  1. Donaghy, Peter & Rolfe, John & Gowen, Rebecca & Bray, Steven & Madonna, Hoffman, 2010. "Assessing the economic impact of an emissions trading scheme on agroforestry in Australia’s northern grazing systems," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 59069, Australian Agricultural and Resource Economics Society.
  2. Ervola, Asta & Lankoski, Jussi E. & Ollikainen, Markku, 2010. "Mitigation options and policies in agricultural sector: a theoretical model and application," 120th Seminar, September 2-4, 2010, Chania, Crete 109320, European Association of Agricultural Economists.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:ags:cafric:45728. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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