IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2007.27.html
   My bibliography  Save this paper

Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders

Author

Listed:
  • Oscar Cacho

    (University of New England)

  • Leslie Lipper

    (Food and Agriculture Organization)

Abstract

Agroforestry projects have the potential to help mitigate global warming by acting as sinks for greenhouse gasses. However, participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by analysing the implications of transaction and abatement costs in carbon-sequestration projects. A model of project participation is developed, which accounts for the conditions under which both buyers and sellers would be willing to engage in a carbon transaction that involves a long-term commitment. The model is used to identify critical project-design variables (minimum project size, farm price of carbon, minimum area of participating farms). A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the transaction costs imposed by the Clean Development Mechanism of the Kyoto Protocol affect project feasibility.

Suggested Citation

  • Oscar Cacho & Leslie Lipper, 2007. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Working Papers 2007.27, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2007.27
    as

    Download full text from publisher

    File URL: http://www.feem.it/userfiles/attach/Publication/NDL2007/NDL2007-027.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. John M. Antle & Roberto O. Valdivia, 2006. "Modelling the supply of ecosystem services from agriculture: a minimum-data approach ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 1-15, March.
    2. Krey, Matthias, 2004. "Transaction costs of CDM projects in India: An empirical survey," HWWA Reports 238, Hamburg Institute of International Economics (HWWA).
    3. Oscar J. Cacho & Robyn L. Hean & Russell M. Wise, 2003. "Carbon-accounting methods and reforestation incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), pages 153-179, June.
    4. Oscar Cacho & Russell Wise & Kenneth MacDicken, 2004. "Carbon Monitoring Costs and their Effect on Incentives to Sequester Carbon through Forestry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 9(3), pages 273-293, July.
    5. Leslie Lipper & Romina Cavatassi, 2003. "Land Use Change, Carbon Sequestration and Poverty Alleviation," Working Papers 03-13, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    6. Oscar J. Cacho & Graham R. Marshall & Mary Milne, 2003. "Smallholder Agroforestry Projects: Potential for carbon sequestration and poverty alleviation," Working Papers 03-06, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    7. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2006," World Bank Other Operational Studies 13409, The World Bank.
    8. Otsuka, Keijiro & Place, Frank, 2001. "Land tenure and natural resource management," Food policy statements 34, International Food Policy Research Institute (IFPRI).
    9. Cacho, Oscar J. & Marshall, Graham R. & Milne, Mary, 2005. "Transaction and abatement costs of carbon-sink projects in developing countries," Environment and Development Economics, Cambridge University Press, vol. 10(05), pages 597-614, October.
    10. Wise, Russell M. & Cacho, Oscar J., 2003. "Tree-crop interactions and their environmental and economic implications in the presence of carbon-sequestration payments," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58271, Australian Agricultural and Resource Economics Society.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donaghy, Peter & Rolfe, John & Gowen, Rebecca & Bray, Steven & Madonna, Hoffman, 2010. "Assessing the economic impact of an emissions trading scheme on agroforestry in Australia’s northern grazing systems," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 59069, Australian Agricultural and Resource Economics Society.
    2. repec:eee:ecolec:v:139:y:2017:i:c:p:115-127 is not listed on IDEAS
    3. Kingwell, Ross S. & Harris-Adams, Keely, 2009. "An analysis of the spatial and temporal patterns of greenhouse gas emissions by agriculture in Western Australia and the opportunities for agroforestry offsets," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48161, Australian Agricultural and Resource Economics Society.
    4. Larson, Donald F. & Dinar, Ariel & Frisbie, J. Aapris, 2011. "Agriculture and the clean development mechanism," Policy Research Working Paper Series 5621, The World Bank.
    5. repec:raf:wpaper:b16863 is not listed on IDEAS
    6. Wiskerke, W.T. & Dornburg, V. & Rubanza, C.D.K. & Malimbwi, R.E. & Faaij, A.P.C., 2010. "Cost/benefit analysis of biomass energy supply options for rural smallholders in the semi-arid eastern part of Shinyanga Region in Tanzania," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 148-165, January.
    7. 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.
    8. Cacho, Oscar J., 2008. "Carbon markets, transaction costs and bioenergy," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6007, Australian Agricultural and Resource Economics Society.
    9. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.

    More about this item

    Keywords

    Agroforestry; Climate Policy; Carbon Sequestration Costs;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2007.27. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah). General contact details of provider: http://edirc.repec.org/data/feemmit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.