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Carbon annuities and their potential to preserve tropical forests and slow global warming: an application for small-scale farmers

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  • Jill L. Caviglia-Harris
  • James R. Kahn
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    Abstract

    Carbon annuities have been suggested as a means for rewarding landowners for preserving forests and sequestering carbon. Although this is an intuitively appealing approach, the benefits of the sequestration activities have not been compared with the opportunity cost of preserving the forest. This paper represents an initial attempt at analysing how large carbon annuities must be to induce a landowner in the Amazonian rainforest to accept the annuity and leave the forest intact. The benefits of carbon sequestration are computed based on estimates in the literature on the carbon contained in a hectare of rainforest and the damages associated with a ton of carbon emissions. This is compared with information on household income from Rondonia, Brazil. Our results show that, for the majority of our conservative assumptions about the damages of carbon emissions, the magnitude of an annuity is greater than the income from agriculture. For less conservative assumptions about the damages from global warming, a fraction of the annuity would be a sufficient incentive for small-scale farmers to switch to sustainable techniques that leave the forest intact.

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    Bibliographic Info

    Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Sustainable Development.

    Volume (Year): 6 (2003)
    Issue (Month): 3 ()
    Pages: 328-344

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    Handle: RePEc:ids:ijsusd:v:6:y:2003:i:3:p:328-344

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    Web page: http://www.inderscience.com/browse/index.php?journalID=25

    Related research

    Keywords: Amazon; carbon annuity; carbon offset; clean development mechanism; deforestation; global warming; forest preservation.;

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    Cited by:
    1. Kahn, James Randall & Franceschi, Dina, 2006. "Beyond Kyoto: A tax-based system for the global reduction of greenhouse gas emissions," Ecological Economics, Elsevier, Elsevier, vol. 58(4), pages 778-787, July.

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