Biological Carbon Sinks: Transaction Costs and Governance
AbstractActivities that remove CO2 from the atmosphere and store it in forest and agricultural ecosystems can generate CO2-offset credits that can thus substitute for CO2 emissions reduction. Are biological CO2-uptake activities competitive with CO2 offsets from reduced fossil fuel use? In this paper, it is argued that transaction costs impose a formidable obstacle to direct substitution of carbon uptake offsets for emissions reduction in trading schemes, and that separate caps should be set for emissions reduction and sink-related activities. While a tax/subsidy scheme is preferred to emissions trading for incorporating biologically-generated CO2 offsets, contracts that focus on the activity and not the amount of carbon sequestered are most likely to lead to the lowest transaction costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group in its series Working Papers with number 2008-12.
Length: 20 pages
Date of creation: Nov 2008
Date of revision:
carbon sequestration; transaction costs; climate change;
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-12-07 (Agricultural Economics)
- NEP-ALL-2008-12-07 (All new papers)
- NEP-ENE-2008-12-07 (Energy Economics)
- NEP-ENV-2008-12-07 (Environmental Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Fortmannm Lea & Salas, Paula Cordero & Sohngen, Brent & Roe, Brian, 2014. "Incentive contracts for environmental services and their potential in REDD," Policy Research Working Paper Series 6829, The World Bank.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G.C. van Kooten).
If references are entirely missing, you can add them using this form.