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An Overview of Carbon Offsets from Agriculture

Author

Listed:
  • Jimena González-Ramírez

    () (Department of Economics, Iowa State University, Ames, Iowa 50011
    Resource and Environmental Policy Division, Center for Agricultural and Resource Development (CARD), Iowa State University, Ames, Iowa 50011)

  • Catherine L. Kling

    () (Department of Economics, Iowa State University, Ames, Iowa 50011
    Resource and Environmental Policy Division, Center for Agricultural and Resource Development (CARD), Iowa State University, Ames, Iowa 50011)

  • Adriana Valcu

    () (Department of Economics, Iowa State University, Ames, Iowa 50011
    Resource and Environmental Policy Division, Center for Agricultural and Resource Development (CARD), Iowa State University, Ames, Iowa 50011)

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.

Suggested Citation

  • Jimena González-Ramírez & Catherine L. Kling & Adriana Valcu, 2012. "An Overview of Carbon Offsets from Agriculture," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 145-160, August.
  • Handle: RePEc:anr:reseco:v:4:y:2012:p:145-160
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    References listed on IDEAS

    as
    1. Charles Mason & Andrew Plantinga, 2011. "Contracting for Impure Public Goods: Carbon Offsets and Additionality," NBER Working Papers 16963, National Bureau of Economic Research, Inc.
    2. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, June.
    3. Harrison Fell & Dallas Burtraw & Richard Morgenstern & Karen Palmer, 2012. "Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost," Land Economics, University of Wisconsin Press, vol. 88(3), pages 589-611.
    4. 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.
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    6. 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.
    7. Woodward, Richard T., 2011. "Double-dipping in environmental markets," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 153-169, March.
    8. 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.
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    10. 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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    13. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2004. "Value of agricultural non-point source pollution measurement technology: assessment from a policy perspective," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2287-2298.
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    More about this item

    Keywords

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

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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