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Land-based greenhouse gas emission offset and leakage discounting

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  • Kim, Man-Keun
  • Peralta, Denis
  • McCarl, Bruce A.

Abstract

This paper examines leakage from agricultural greenhouse gas reduction programs stimulated by reductions in regional commodity supply. This paper develops an extension of the leakage discount formula in Murray et al. (2004) that incorporates changes in input (land) usage rather than product output (crop or forest product quantity). Additionally the leakage discount developed here allows for land conversion and production replacement involving multiple alternative uses. In an empirical application in the Southeast Texas we compute leakage discounts of 14.8% for the conversion of rice to no-till sorghum and 14.9% for rice to pasture program. Most of the sources of GHG offset leakage come from conversions of cotton to rice and pasture to rice in the other regions.

Suggested Citation

  • Kim, Man-Keun & Peralta, Denis & McCarl, Bruce A., 2014. "Land-based greenhouse gas emission offset and leakage discounting," Ecological Economics, Elsevier, vol. 105(C), pages 265-273.
    • Handle: RePEc:eee:ecolec:v:105:y:2014:i:c:p:265-273
    DOI: 10.1016/j.ecolecon.2014.06.009
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    Cited by:

    1. Huiying Ye & Qi Zhang & Xunzhang Pan & Arash Farnoosh, 2020. "Market-induced carbon leakage in China’s certified emission reduction projects," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(6), pages 987-1012, August.
    2. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117928, London School of Economics and Political Science, LSE Library.
    3. Pan, Wenqi & Kim, Man-Keun & Ning, Zhuo & Yang, Hongqiang, 2020. "Carbon leakage in energy/forest sectors and climate policy implications using meta-analysis," Forest Policy and Economics, Elsevier, vol. 115(C).
    4. Filewod, Ben & McCarney, Geoff, 2023. "Avoiding leakage from nature-based offsets by design," LSE Research Online Documents on Economics 117927, London School of Economics and Political Science, LSE Library.
    5. Meng-Shiuh Chang & Chih-Chun Kung, 2018. "The greenhouse gas impact of bioenergy in developing economies: Evidence from Taiwan," Energy & Environment, , vol. 29(3), pages 315-332, May.

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    More about this item

    Keywords

    Carbon sequestration; Leakage; Discount;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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