Land-use change and carbon sinks: Econometric estimation of the carbon sequestration supply function

If the United States chooses to implement a greenhouse gas reduction program, it would be necessary to decide whether to include carbon sequestration policies—such as those that promote forestation and discourage deforestation—as part of the domestic portfolio of compliance activities. We investigat...

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Bibliographic Details
Published in:Journal of environmental economics and management 2006-03, Vol.51 (2), p.135-152
Main Authors: Lubowski, Ruben N., Plantinga, Andrew J., Stavins, Robert N.
Format: Article
Language:English
Subjects:
Abatement
attitudes and opinions
Carbon
Carbon dioxide
Carbon sequestration
Climate change
Costs
costs and returns
econometric models
Econometrics
economic analysis
Emissions control
Environment
Environmental economics
Environmental management
environmental policy
forest policy
Forestry
Greenhouse effect
Greenhouse gases
issues and policy
Land use
Land-use change
Landowners
nonindustrial private forests
Sequestration
simulation models
Studies
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Summary:If the United States chooses to implement a greenhouse gas reduction program, it would be necessary to decide whether to include carbon sequestration policies—such as those that promote forestation and discourage deforestation—as part of the domestic portfolio of compliance activities. We investigate the cost of forest-based carbon sequestration by analyzing econometrically micro-data on revealed landowner preferences, modeling six major private land uses in a comprehensive analysis of the contiguous United States. The econometric estimates are used to simulate landowner responses to sequestration policies. We treat key commodity prices as endogenous and predict carbon storage changes with a carbon sink model. Our estimated sequestration costs exceed those from previous engineering cost analyses and sectoral optimization models. Our estimated sequestration supply function is similar to the carbon abatement supply function from energy-based analyses, suggesting that forest-based carbon sequestration merits consideration in a cost-effective portfolio of domestic US climate change strategies.
ISSN:0095-0696
1096-0449
1096-0449
DOI:10.1016/j.jeem.2005.08.001