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

Author

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

Abstract

Emerging policies directed toward greenhouse gas emission (GHGE) reductions are causing governments and industries to consider the merits of GHGE mitigation possibilities. Land-based biological sequestration (LBS) is being evaluated as one potential way to achieve net GHGE reductions. Some have argued that LBS strategies are relatively inexpensive ways of lessening GHGE mitigation costs as well as increasing economic opportunities for farmers and foresters. However, there seem to be doubts in the international community regarding issues of permanence, leakage, monitoring, measurement, and transaction costs. Here, the authors investigate the effects of permanence, examining the influence of permanence on the relative value of an LBS offset versus a direct emission offset. Specifically, they estimate the relative value to a carbon purchaser of LBS and emission offsets as they arise over time. The authors also treat the concept of rental of carbon sequestered through LBS, and examine bridge-to-the-future scenarios, which introduce nonconstant future GHGE offset prices. Finally, they investigate the implications that permanence-related price discounts may have on the potential contribution of LBS activities to GHGE offset efforts.

Suggested Citation

  • Bruce A. McCarl & Brian C. Murray & Uwe A. Schneider, 2001. "Influences of Permanence on the Comparative Value of Biological Sequestration versus Emissions Offsets," Center for Agricultural and Rural Development (CARD) Publications 01-wp282, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:01-wp282
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    Citations

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    Cited by:

    1. de Cara, Stephane & Rozakis, Stelios, 2004. "Carbon sequestration through the planting of multi-annual energy crops: A dynamic and spatial assessment," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 5(1), January.
    2. Michael Dutschke, 2007. "CDM Forestry and the Ultimate Objective of the Climate Convention," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(2), pages 275-302, February.
    3. de Cara, Stephane & Rozakis, Stelios, 2003. "Carbon sequestration in agricultural soils: A dynamic assessment," 2003 Annual meeting, July 27-30, Montreal, Canada 21913, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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