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Influences of Permanence on the Comparative Value of Biological Sequestration versus Emissions Offsets

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  • McCarl, Bruce A.
  • Murray, Brian C.
  • Schneider, Uwe A.

Abstract

We use a net present value framework to examine the impact of non-permanence on the economics of land-based biological carbon sequestration. Contingent on assumptions about discount rates, management, and carbon prices trajectories, and payment contract design, we find the adjusted value of carbon sequestration relative to permanently available emission offsets to be between 38 and 55 percent for agricultural soil offsets and between 51 and 99 percent for afforestation offsets. Simulations with an Agricultural Sector Model show the empirical effect of sequestration value discounts on the total potential of U.S. agricultural sinks to mitigate greenhouse gas emissions within a multistrategy setting.

Suggested Citation

  • McCarl, Bruce A. & Murray, Brian C. & Schneider, Uwe A., 2001. "Influences of Permanence on the Comparative Value of Biological Sequestration versus Emissions Offsets," Hebrew University of Jerusalem Archive 18448, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18448
    DOI: 10.22004/ag.econ.18448
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    References listed on IDEAS

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    1. Philip Fearnside & Daniel Lashof & Pedro Moura-Costa, 2000. "Accounting for time in Mitigating Global Warming through land-use change and forestry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 5(3), pages 239-270, September.
    2. Bruce A. McCarl & Uwe A. Schneider, 2000. "U.S. Agriculture's Role in a Greenhouse Gas Emission Mitigation World: An Economic Perspective," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 22(1), pages 134-159.
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    Cited by:

    1. Schneider, Uwe A., 2002. "The Cost Of Agricultural Carbon Savings," Hebrew University of Jerusalem Archive 18509, Hebrew University of Jerusalem.

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