Long Term Versus Temporary Certified Emission Reductions in Forest Carbon-Sequestration Programs
Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, forest projects can receive returns for carbon sequestration via two credit instruments: temporary (tCERs) or long-term certified emission reductions (lCERs). This article develops a theoretical model of optimal harvesting strategies that compares private optimal harvest decision under these two instruments. We find that risk neutral landowners are likely to prefer instituting lCERs over tCERs to maximize surplus. A particular type of early harvest penalty implemented under the lCERs is critical in determining the length of rotation intervals and the carbon credit supply. When this penalty is an increasing function of the difference in biomass before and after harvesting across verification periods, the landowner may choose longer or shorter rotation intervals compared to the Faustmann rotation. The resulting supply curve may have a backward bending region over a range of carbon prices.
|Date of creation:||Dec 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://faculty.ses.wsu.edu/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heng-Chi Lee & Bruce A. McCarl, 2004.
"The Dynamic Competitiveness of U.S. Agricultural and Forest Carbon Sequestration,"
UWO Department of Economics Working Papers
20044, University of Western Ontario, Department of Economics, revised Nov 2003.
- Heng-Chi Lee & Bruce A. McCarl & Dhazn Gillig, 2005. "The Dynamic Competitiveness of U.S. Agricultural and Forest Carbon Sequestration," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 343-357, December.
- 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, 06.
- Cacho, Oscar J. & Hean, Robyn L. & Wise, Russell M., 2003. "Carbon-accounting methods and reforestation incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), June.
- Cacho, Oscar J. & Hean, Robyn L. & Wise, Russell M., 2002. "Carbon-Accounting Methods and Reforestation Incentives," 2002 Conference (46th), February 13-15, 2002, Canberra 125067, Australian Agricultural and Resource Economics Society.
- M. Germain & A. Magnus & V. Steenberghe, 2007. "How to design and use the clean development mechanism under the Kyoto Protocol? A developing country perspective," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(1), pages 13-30, September.
- Olschewski, Roland & Benítez, Pablo C. & de Koning, G.H.J. & Schlichter, Tomás, 2005. "How attractive are forest carbon sinks? Economic insights into supply and demand of Certified Emission Reductions," Journal of Forest Economics, Elsevier, vol. 11(2), pages 77-94, September.
- Gregmar I. Galinato & Shinsuke Uchida, 2011. "The Effect of Temporary Certified Emission Reductions on Forest Rotations and Carbon Supply," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59(1), pages 145-164, 03.
- Graeme Guthrie & Dinesh Kumareswaran, 2009. "Carbon Subsidies, Taxes and Optimal Forest Management," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(2), pages 275-293, June.
- William D. Nordhaus, 1991. "The Cost of Slowing Climate Change: a Survey," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 37-66.
- Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
When requesting a correction, please mention this item's handle: RePEc:wsu:wpaper:galinato-2. 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: (Danielle Engelhardt)
If references are entirely missing, you can add them using this form.