Long Term Versus Temporary Certified Emission Reductions in Forest Carbon-Sequestration Programs

Gregmar Galinato (), Aaron Olanie, Shinsuke Uchida and Jonathan Yoder ()

No 2009-20, Working Papers from School of Economic Sciences, Washington State University

Abstract: 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.

Keywords: forest rotation; long term certified emission reductions (lCERs); carbon sequestration (search for similar items in EconPapers)
JEL-codes: Q2 Q23 Q54 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2009-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-ppm
References: Add references at CitEc
Citations:

Downloads: (external link)
http://faculty.ses.wsu.edu/WorkingPapers/Galinato/WP2009_20.pdf First version, 2009 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://faculty.ses.wsu.edu/WorkingPapers/Galinato/WP2009_20.pdf [307 Temporary Redirect]--> https://ses.wsu.edu/faculty/)

Related works:
Journal Article: Long-term versus temporary certified emission reductions in forest carbon sequestration programs (2011)
Journal Article: Long‐term versus temporary certified emission reductions in forest carbon sequestration programs (2011)
Working Paper: Long Term Versus Temporary Certified Emission Reductions in Forest Carbon-Sequestration Programs (2010)
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:wsu:wpaper:galinato-2

Access Statistics for this paper

More papers in Working Papers from School of Economic Sciences, Washington State University Contact information at EDIRC.
Bibliographic data for series maintained by Danielle Engelhardt ().