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Mitigating Climate Change by Planting Trees: The Transaction Costs Trap

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  • G. Cornelis van Kooten
  • Sabina Lee Shaikh
  • Pavel Suchánek

Abstract

Land-use change and forestry projects are considered a low-cost option for addressing climate change mitigation. In Canada, afforestation is targeted to sequester enough carbon to meet one-fifth of its international obligations, and at lower cost than emissions reduction. We examine economic aspects of the institutions and incentives needed to encourage landowners in Canada to adopt tree planting on a large scale. Based on data from a survey of landowners, the transaction costs of getting landowners to convert their land from agriculture to plantation forests appear to be a significant obstacle, possibly increasing the costs of afforestation projects beyond what conventional economic analysis suggests.

Suggested Citation

  • G. Cornelis van Kooten & Sabina Lee Shaikh & Pavel Suchánek, 2002. "Mitigating Climate Change by Planting Trees: The Transaction Costs Trap," Land Economics, University of Wisconsin Press, vol. 78(4), pages 559-572.
    • Handle: RePEc:uwp:landec:v:78:y:2002:i:4:p:559-572
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    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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