Land use and general equilibrium implications of a forest-based carbon sequestration policy in the United States

Juan J. Monge, Henry L. Bryant, Jianbang Gan and James Richardson ()

Ecological Economics, 2016, vol. 127, issue C, 102-120

Abstract: A comparative static Computable General Equilibrium model was used to assess the impacts of forest-based carbon payments on sequestration, land use, and agricultural commodity prices in the U.S. A modified 2008 regional Social Accounting Matrix, considering land as a heterogeneous factor, was used as the model's main input. The matrix was projected to its 2050 counterpart using capital and labour growth projections. The forest-generated carbon offset sources considered were afforested set-asides, commercial forestry intensification and harvested wood products. A new dataset on regional afforestation carbon uptake rates and costs was used to include afforested set-asides as latent activities. For a carbon offset price of $20/MT CO2, 12% of U.S. annual emissions could be sequestered in 2050. More than half of the additional carbon sequestered (611millionMT CO2), compared to the 2050 baseline, would be attributed to set-asides and composed mainly of softwood forests. High carbon prices would increase land prices resulting in the diversion of 15% and 8% of pasture and cropland to carbon set-asides, respectively, mainly in the Central Plains. The high agricultural land diversion would force activities to intensify production systems driving the prices of beef up by 14% as well as oilseeds and grains by 3% and 4%, respectively.

Keywords: Carbon sequestration; Afforestation; Set-aside; Land-use change; Computable General Equilibrium; Heterogeneous land; Major land resource areas; Management intensity (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:127:y:2016:i:c:p:102-120

DOI: 10.1016/j.ecolecon.2016.03.015

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