Gren, Ing-Marie
- Department of Economics, Swedish University of Agricultural Sciences
Abstract
Forest carbon enhancement provides a low-cost opportunity in climate policy, but needs efficient policy design to be implemented. This paper reviews studies in economics on efficient design of policies for forest carbon sequestration and compares their findings against design systems in practice. Specific design problems are associated with the heterogeneity of landowners, uncertainty, additionality, and permanence in carbon projects. Different types of discounting of the value of the forest carbon sink compared with emissions abatement are suggested in the literature for management of most design problems, together with optimal contract design and emissions baselines for managing additionality and permanence in carbon sequestration. Design systems in practice, where forest carbon corresponds to 0.5% of all carbon volume subject to a pricing mechanism, mainly rely on additionality tests by approved standards on a project-by-project basis, and on buffer credits for management of permanence. Further development of forest carbon sinks as offsets in voluntary and compliance markets can be facilitated by applying tools for contract design and offset baseline management recommended in the literature.
Keywords
Policy design; Forest carbon sequestration; Survey
Published in
Forest Policy and Economics
2016, volume: 70, pages: 128-136
SLU Authors
Aklilu, Abenezer Zeleke
- Department of Economics, Swedish University of Agricultural Sciences
- Department of Economics, Swedish University of Agricultural Sciences
Global goals (SDG)
UKÄ Subject classification
Economics
Publication identifier
- DOI: https://doi.org/10.1016/j.forpol.2016.06.008
Permanent link to this page (URI)
https://res.slu.se/id/publ/77664