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Estimating the Supply of Forest Carbon Offsets: A Comparison of Best- Worst and Discrete Choice Valuation Methods

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  • Soto, Jose R.
  • Adams, Damian C.

Abstract

The use of carbon markets to regulate greenhouse gasses has been promoted as a cost-effective tool to deal with global warming. These markets often encourage forest landowners to capture carbon in exchange for compensation, by using different platforms that vary in terms of contract length, penalties for withdrawal, etc. These differences in available carbon programs send signals to both consumers, and potential producers of carbon credits, which often cause confusion, price variations, and potential barriers to participation. This study uses one of the most comprehensive lists of Florida non-industrial private forest landowners to implement two different conjoint choice tasks (best worst choice and discrete choice experimentation), which offer multiple options to estimate attitudes of landowners towards different carbon programs, as well as various avenues to estimate willingness to accept. Results indicate that landowners would need between $20 to $30 acre-per-year to be positively affected by revenue, while the inclusion of penalty for early withdrawal increases cost of participation by approximately $4.45 to $10.41 acre-per-year. In addition, this study compares the performance of best worst choice with the traditional discrete choice experimentation method, and finds similar estimates of willingness to accept from both models, but disagreement with overall attribute impact estimates.

Suggested Citation

  • Soto, Jose R. & Adams, Damian C., 2012. "Estimating the Supply of Forest Carbon Offsets: A Comparison of Best- Worst and Discrete Choice Valuation Methods," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124830, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:124830
    DOI: 10.22004/ag.econ.124830
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    References listed on IDEAS

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    2. Sabina L. Shaikh & Lili Sun & G. Cornelis Van Kooten, 2007. "Are Agricultural Values a Reliable Guide in Determining Landowners' Decisions to Create Forest Carbon Sinks?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(1), pages 97-114, March.
    3. Pancholy, Nishita & Thomas, Michael H. & Solís, Daniel & Stratis, Nicholas, 2011. "The impact of biofuels on the propensity of land-use conversion among non-industrial private forest landowners in Florida," Forest Policy and Economics, Elsevier, vol. 13(7), pages 570-574, September.
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    Cited by:

    1. Zhou, Mo, 2015. "Adapting sustainable forest management to climate policy uncertainty: A conceptual framework," Forest Policy and Economics, Elsevier, vol. 59(C), pages 66-74.

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    Environmental Economics and Policy; Resource /Energy Economics and Policy;

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