Carbon markets, transaction costs and bioenergy

Oscar Cacho

No 6007, 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia from Australian Agricultural and Resource Economics Society

Abstract: Payment for carbon sequestration by agriculture and forestry can provide incentives for adoption of sustainable agricultural practices. However, a project involving contracts with farmers may face high transaction costs in showing that net emission reductions are real and attributable to the project. This paper presents a model of project participation that includes transaction and abatement costs. A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the design of a climate mitigation program may affect the feasibility of actual projects.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 17
Date: 2008
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare08:6007

DOI: 10.22004/ag.econ.6007

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