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An Overview of Carbon Offsets from Agriculture

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  • Gonzalex-Ramirez, Jimena
  • Kling, Catherine Louise
  • valcu, adriana

Abstract

Although climate change has largely been removed from the federal policy agenda of the United States in the near term, the continued reliance on fossil fuels as a dominant energy source leaves many analysts to conclude that climate policy will eventually reappear on that agenda. We present a review of recent research related to the design and implementation of one instrument for greenhouse gas (GHG) reduction: offsets. As these are implemented, policy makers must understand the way these programs work. In this review, we describe the basic features of carbon offset markets, along with the potential supply of offsets from agricultural sources and associated cost considerations. In this discussion we highlight the role of institutional design of contracts and transactions costs. We then turn to the benefits of including offsets in policies to reduce GHGs and complete the review with a discussion of the challenges in implementing the programs.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 35575.

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Date of creation: 18 Oct 2012
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Handle: RePEc:isu:genres:35575

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Related research

Keywords: GHGs; carbon policy; conservation practices; carbon supply curves; additionality; leakage;

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References

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  1. Feng, Hongli, 2005. "The dynamics of carbon sequestration and alternative carbon accounting, with an application to the upper Mississippi River Basin," Ecological Economics, Elsevier, vol. 54(1), pages 23-35, July.
  2. Woodward, Richard T., 2011. "Double-dipping in environmental markets," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 153-169, March.
  3. James B. Bushnell, 2011. "The Economics of Carbon Offsets," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 197-209 National Bureau of Economic Research, Inc.
  4. Kurkalova, Lyubov A. & Kling, Catherine L. & Zhao, Jinhua, 2004. "Value of Agricultural Nonpoint Source Pollution Measurement Technology: Assessment from a Policy Perspective," Staff General Research Papers 12328, Iowa State University, Department of Economics.
  5. Fell, Harrison & Burtraw, Dallas & Morgenstern, Richard & Palmer, Karen, 2011. "Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost," Discussion Papers dp-10-01-rev, Resources For the Future.
  6. Schneider, Uwe A. & Kumar, Pushpam, 2008. "Greenhouse Gas Mitigation through Agriculture," Choices, Agricultural and Applied Economics Association, vol. 23(1).
  7. Michael Grubb & Tim Laing & Thomas Counsell & Catherine Willan, 2011. "Global carbon mechanisms: lessons and implications," Climatic Change, Springer, vol. 104(3), pages 539-573, February.
  8. Hongli Feng, 2005. "Dynamics of Carbon Sequestration and Alternative Carbon Accounting, with an Application to the Upper Mississippi River Basin, The," Center for Agricultural and Rural Development (CARD) Publications 05-wp386, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  9. Kling, Catherine L. & Kurkalova, Lyubov A. & Zhao, Jinhua, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Staff General Research Papers 12344, Iowa State University, Department of Economics.
  10. Antle, John & Capalbo, Susan & Mooney, Sian & Elliott, Edward & Paustian, Keith, 2003. "Spatial heterogeneity, contract design, and the efficiency of carbon sequestration policies for agriculture," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 231-250, September.
  11. Hahn, Robert W. & Richards, Kenneth, 2010. "Environmental Offset Programs: Survey and Synthesis," Working paper 636, Regulation2point0.
  12. Hongli Feng & Lyubov A. Kurkalova & Catherine L. Kling & Philip W. Gassman, 2005. "Economic and Environmental Co-benefits of Carbon Sequestration in Agricultural Soils: Retiring Agricultural Land in the Upper Mississippi River Basin," Center for Agricultural and Rural Development (CARD) Publications 05-wp384, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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