Are Grassland Conservation Programs a Cost-Effective Way to Fight Climate Change? Evidence from France

Sylvain Chabé-Ferret and Anca Voia

No 21-1248, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Grassland, especially when extensively managed and when replacing cropland, stores carbon in the ground. As a result, Grassland Conservation Programs, that pay farmers for maintaining grassland cover, might be an effective way to combat climate change, if they succeed in triggering an increase in grassland cover at the expense of cropland for a reasonable amount of money. In this paper, we use a natural experiment to estimate the cost-effectiveness of the French Grassland Conservation Program, the largest of such programs in the world. We exploit a change in the eligibility requirements for the program that generated a sizable increase in the proportion of participants in the areas most affected by the reform. We find that the expansion of the program lead to a small increase in grassland area, mainly at the expense of croplands, which implies that the program expansion increased carbon storage. We also find that the elasticity of grassland provision is low, and that, as a result, the program has large windfall gains. To compute the benefit-cost ratio of the program, we combine our results with similar estimates from the liter- ature using meta-analysis tools and we introduce the resulting parameter in a model of carbon storage in grassland. We find that, for a carbon price of 24 Euros/tCO2 eq, the climate benefits of the program are equal to 7±3% of its costs. When taking into account the other benefits brought about by grassland, we find the benefits of the program to be equal to 44±15% of its costs. We estimate that the program would break even for a carbon price of 194±122 Euros/tCO2 eq.

Keywords: Payment for Ecosystem Services; Grassland; Natural Experiment; Treatment Effect (search for similar items in EconPapers)
JEL-codes: Q15 Q18 Q24 Q28 Q57 (search for similar items in EconPapers)
Date: 2021-09-06
New Economics Papers: this item is included in nep-agr, nep-env and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... 2021/wp_tse_1248.pdf Full Text (application/pdf)

Related works:
Working Paper: Are Grassland Conservation Programs a Cost-Effective Way to Fight Climate Change? Evidence from France (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:125928

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().