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Poverty, risk, and the supply of soil carbon sequestration

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  • GRAFF-ZIVIN, JOSHUA
  • LIPPER, LESLIE

Abstract

We explore poor farmers' incentives to adopt production systems that increase soil carbon sequestration, focusing on the impact of risk. A dynamic optimization model of conservation agriculture adoption is presented, where farmers optimize over expected utility of profits from agriculture and carbon sequestration. Adoption impacts on agricultural productivity are modeled as a combination of the technological effects of the new system, and productivity effects of changes in soil carbon on agricultural output. Comparative static results indicate increases in soil carbon sequestration price and the discount rate have unambiguous impacts on equilibrium soil carbon levels; the former leading to higher, and the latter to lower, carbon levels. Increases in the price of agricultural output and risk aversion have ambiguous impacts, depending on the relative strength of the productivity and technology effects. The paper concludes with a discussion of designing soil carbon payment mechanisms to benefit low income farmers.

Suggested Citation

  • Graff-Zivin, Joshua & Lipper, Leslie, 2008. "Poverty, risk, and the supply of soil carbon sequestration," Environment and Development Economics, Cambridge University Press, vol. 13(3), pages 353-373, June.
    • Handle: RePEc:cup:endeec:v:13:y:2008:i:03:p:353-373_00
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    Cited by:

    1. Akpalu, Wisdom & Anders, Ekbom, 2010. "Bio-economics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries," Working Papers in Economics 431, University of Gothenburg, Department of Economics.
    2. Hari Dulal & Gernot Brodnig & Kalim Shah, 2011. "Capital assets and institutional constraints to implementation of greenhouse gas mitigation options in agriculture," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(1), pages 1-23, January.
    3. Matthew Harding & David Rapson, 2019. "Does Absolution Promote Sin? A Conservationist’s Dilemma," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 923-955, July.
    4. Kopper, Sarah A. & Jayne, Thomas S. & Snapp, Sieglinde S., 2020. "Sifting through the weeds: Understanding heterogeneity in fertilizer and labor response in Central Malawi," Ecological Economics, Elsevier, vol. 169(C).
    5. Pannell, David J. & Llewellyn, Rick S. & Corbeels, Marc, 2013. "The farm-level economics of conservation agriculture for resource-poor farmers," Working Papers 166526, University of Western Australia, School of Agricultural and Resource Economics.
    6. Larson, Donald F. & Dinar, Ariel & Frisbie, J. Aapris, 2011. "Agriculture and the clean development mechanism," Policy Research Working Paper Series 5621, The World Bank.
    7. Sihvonen, Matti & Pihlainen, Sampo & Lai, Tin-Yu & Salo, Tapio & Hyytiäinen, Kari, 2021. "Crop production, water pollution, or climate change mitigation—Which drives socially optimal fertilization management most?," Agricultural Systems, Elsevier, vol. 186(C).
    8. Larson, Donald F. & Dinar, Ariel & Blankespoor, Brian, 2012. "Aligning climate change mitigation and agricultural policies in Eastern Europe and Central Asia," Policy Research Working Paper Series 6080, The World Bank.
    9. Yoshito Takasaki & Oliver T. Coomes & Christian Abizaid & Stéphanie Brisson, 2014. "An Efficient Nonmarket Institution under Imperfect Markets: Labor Sharing for Tropical Forest Clearing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 711-732.
    10. Leisa Perch, 2011. "Mitigation of What and by What? Adaptation by Whom and for Whom? Dilemmas in Delivering for the Poor and the Vulnerable in International Climate Policy," Working Papers 79, International Policy Centre for Inclusive Growth.
    11. Yoshito Takasaki, 2011. "Economic models of shifting cultivation: a review," Tsukuba Economics Working Papers 2011-006, Faculty of Humanities and Social Sciences, University of Tsukuba.
    12. Nicholas J Pates & Nathan P Hendricks, 2020. "Additionality from Payments for Environmental Services with Technology Diffusion," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 281-299, January.

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