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Are Agricultural Values a Reliable Guide in Determining Landowners’ Decisions to Create Carbon Forest Sinks?

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  • Shaikh, Sabina L.
  • Sun, Lili
  • van Kooten, G. Cornelis

Abstract

This research examines the effects of various factors on farmer participation in agricultural tree plantations for economic, environmental, social and carbon-uptake purposes, and potential costs of sequestering carbon through afforestation in western Canada. Using data from a survey of landowners, a discrete choice random utility model is used to determine the probability of landowners’ participation and corresponding mean willingness to accept (WTA) compensation for a tree-planting program. WTA includes positive and negative benefits to landowners from planting trees, benefits not captured by foregone returns from agricultural activities on marginal land. Estimates of WTA are less than foregone returns, but even so average costs of creating carbon credits still exceed their projected value under a CO2-emissions trading scheme.

Suggested Citation

  • Shaikh, Sabina L. & Sun, Lili & van Kooten, G. Cornelis, 2005. "Are Agricultural Values a Reliable Guide in Determining Landowners’ Decisions to Create Carbon Forest Sinks?," Working Papers 37017, University of Victoria, Resource Economics and Policy.
    • Handle: RePEc:ags:uvicwp:37017
    DOI: 10.22004/ag.econ.37017
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    1. van Kooten, G. Cornelis & Eagle, Alison J. & Manley, James G. & Smolak, Tara M., 2004. "How Costly Are Carbon Offsets? A Meta-Analysis Of Carbon Forest Sinks," Working Papers 18166, University of Victoria, Resource Economics and Policy.
    2. Mary Riddel & W. Douglass Shaw, 2003. "Option Wealth and Bequest Values: The Value of Protecting Future Generations from the Health Risks of Nuclear Waste Storage," Land Economics, University of Wisconsin Press, vol. 79(4), pages 537-548.
    3. Robert N. Stavins, 1999. "The Costs of Carbon Sequestration: A Revealed-Preference Approach," American Economic Review, American Economic Association, vol. 89(4), pages 994-1009, September.
    4. Krcmar, Emina & Nelson, Harry & van Kooten, G. Cornelis & Vertinsky, Ilan & Webb, Jim, 2005. "Can Forest Management Strategies Sustain The Development Needs Of The Little Red River Cree First Nation?," Working Papers 37012, University of Victoria, Resource Economics and Policy.
    5. Cooper Joseph C., 1993. "Optimal Bid Selection for Dichotomous Choice Contingent Valuation Surveys," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 25-40, January.
    6. Krcmar, Emina & Stennes, Brad & Cornelis van Kooten, G. & Vertinsky, Ilan, 2001. "Carbon sequestration and land management under uncertainty," European Journal of Operational Research, Elsevier, vol. 135(3), pages 616-629, December.
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    8. Bell, Caroline D. & Roberts, Roland K. & English, Burton C. & Park, William M., 1994. "A Logit Analysis Of Participation In Tennessee'S Forest Stewardship Program," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(2), pages 1-10, December.
    9. G. Cornelis van Kooten & Clark S. Binkley & Gregg Delcourt, 1995. "Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 365-374.
    10. 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.
    11. G. Cornelis van Kooten & Alison Eagle & James Manley & Tara Smolak, 2004. "How Costly are Carbon Offsets? A Meta-Analysis of Forest Carbon Sinks," Working Papers 2004-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    12. Roger A. Sedjo & Gregg Marland, 2003. "Inter-trading permanent emissions credits and rented temporary carbon emissions offsets: some issues and alternatives," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 435-444, December.
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    Cited by:

    1. Lili Sun & G. Kooten, 2009. "Comparing Fuzzy and Probabilistic Approaches to Preference Uncertainty in Non-Market Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 42(4), pages 471-489, April.

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    More about this item

    Keywords

    Environmental Economics and Policy; Land Economics/Use; Resource /Energy Economics and Policy;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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