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Poverty, risk, and the supply of soil carbon sequestration

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  • GRAFF-ZIVIN, JOSHUA
  • LIPPER, LESLIE

Abstract

We explore poor farmers' incentives to adopt production systems that increase soil carbon sequestration, focusing on the impact of risk. A dynamic optimization model of conservation agriculture adoption is presented, where farmers optimize over expected utility of profits from agriculture and carbon sequestration. Adoption impacts on agricultural productivity are modeled as a combination of the technological effects of the new system, and productivity effects of changes in soil carbon on agricultural output. Comparative static results indicate increases in soil carbon sequestration price and the discount rate have unambiguous impacts on equilibrium soil carbon levels; the former leading to higher, and the latter to lower, carbon levels. Increases in the price of agricultural output and risk aversion have ambiguous impacts, depending on the relative strength of the productivity and technology effects. The paper concludes with a discussion of designing soil carbon payment mechanisms to benefit low income farmers.

Suggested Citation

  • Graff-Zivin, Joshua & Lipper, Leslie, 2008. "Poverty, risk, and the supply of soil carbon sequestration," Environment and Development Economics, Cambridge University Press, vol. 13(03), pages 353-373, June.
  • Handle: RePEc:cup:endeec:v:13:y:2008:i:03:p:353-373_00
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    1. repec:raf:wpaper:b16863 is not listed on IDEAS
    2. Akpalu, Wisdom & Anders, Ekbom, 2010. "The Bioeconomics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries," Discussion Papers dp-10-07-efd, Resources For the Future.
    3. Leisa Perch, 2011. "Mitigation of What and by What? Adaptation by Whom and for Whom? Dilemmas in Delivering for the Poor and the Vulnerable in International Climate Policy," Working Papers 79, International Policy Centre for Inclusive Growth.
    4. repec:raf:wpaper:b14960. is not listed on IDEAS
    5. Hari Dulal & Gernot Brodnig & Kalim Shah, 2011. "Capital assets and institutional constraints to implementation of greenhouse gas mitigation options in agriculture," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(1), pages 1-23, January.
    6. Yoshito Takasaki & Oliver T. Coomes & Christian Abizaid & Stéphanie Brisson, 2014. "An Efficient Nonmarket Institution under Imperfect Markets: Labor Sharing for Tropical Forest Clearing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 711-732.
    7. Akpalu, Wisdom & Anders, Ekbom, 2010. "Bio-economics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries," Working Papers in Economics 431, University of Gothenburg, Department of Economics.
    8. Yoshito Takasaki, 2011. "Economic models of shifting cultivation: a review," Tsukuba Economics Working Papers 2011-006, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    9. Pannell, David J. & Llewellyn, Rick S. & Corbeels, Marc, 2013. "The farm-level economics of conservation agriculture for resource-poor farmers," Working Papers 166526, University of Western Australia, School of Agricultural and Resource Economics.
    10. Larson, Donald F. & Dinar, Ariel & Blankespoor, Brian, 2012. "Aligning climate change mitigation and agricultural policies in Eastern Europe and Central Asia," Policy Research Working Paper Series 6080, The World Bank.
    11. Larson, Donald F. & Dinar, Ariel & Frisbie, J. Aapris, 2011. "Agriculture and the clean development mechanism," Policy Research Working Paper Series 5621, The World Bank.

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