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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.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 78 (2002)
Issue (Month): 4 ()
Pages: 559-572

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Handle: RePEc:uwp:landec:v:78:y:2002:i:4:p:559-572

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Web page: http://le.uwpress.org/

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Cited by:
  1. Elberg Nielsen, Anne Sofie & Plantinga, Andrew J. & Alig, Ralph J., 2014. "Mitigating climate change through afforestation: New cost estimates for the United States," Resource and Energy Economics, Elsevier, vol. 36(1), pages 83-98.
  2. Shaikh, Sabina L. & Sun, Lili & Cornelis van Kooten, G., 2007. "Treating respondent uncertainty in contingent valuation: A comparison of empirical treatments," Ecological Economics, Elsevier, vol. 62(1), pages 115-125, April.
  3. Yazhen Gong, 2010. "Integrating Social Capital into Institutional Analysis of the Guangxi CDM Forest-based Carbon Sequestration Project," EEPSEA Special and Technical Paper tp201010t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Oct 2010.
  4. Benitez, Pablo C. & McCallum, Ian & Obersteiner, Michael & Yamagata, Yoshiki, 2007. "Global potential for carbon sequestration: Geographical distribution, country risk and policy implications," Ecological Economics, Elsevier, vol. 60(3), pages 572-583, January.
  5. Jung, Martina, 2003. "The Role of Forestry Sinks in the CDM - Analysing the Effects of Policy Decisions on the Carbon Market," HWWA Discussion Papers 241, Hamburg Institute of International Economics (HWWA).
  6. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.
  7. Pajot, Guillaume, 2011. "Rewarding carbon sequestration in South-Western French forests: A costly operation?," Journal of Forest Economics, Elsevier, vol. 17(4), pages 363-377.
  8. Sen Wang & Tim Bogle & G. Cornelis van Kooten, 2012. "Forestry and the New Institutional Economics," Working Papers 2012-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  9. Shaikh, Sabina L. & van Kooten, G. Cornelis, 2003. "Using Contingent Valuation With Respondent Uncertainty To Estimate The Costs Of Climate Change Programs: An Application To Canadian Landowners," 2003 Annual meeting, July 27-30, Montreal, Canada 21906, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  10. Sjølie, Hanne K. & Latta, Greg S. & Solberg, Birger, 2013. "Dual discounting in climate change mitigation in the forest sector," Journal of Forest Economics, Elsevier, vol. 19(4), pages 416-431.
  11. Di Falco, Salvatore & Bulte, Erwin, 2013. "The Impact of Kinship Networks on the Adoption of Risk-Mitigating Strategies in Ethiopia," World Development, Elsevier, vol. 43(C), pages 100-110.

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