Influences of Permanence on the Comparative Value of Biological Sequestration versus Emissions Offsets

Bruce A. McCarl, Brian C. Murray and Uwe A. Schneider

No 18448, Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem

Abstract: We use a net present value framework to examine the impact of non-permanence on the economics of land-based biological carbon sequestration. Contingent on assumptions about discount rates, management, and carbon prices trajectories, and payment contract design, we find the adjusted value of carbon sequestration relative to permanently available emission offsets to be between 38 and 55 percent for agricultural soil offsets and between 51 and 99 percent for afforestation offsets. Simulations with an Agricultural Sector Model show the empirical effect of sequestration value discounts on the total potential of U.S. agricultural sinks to mitigate greenhouse gas emissions within a multistrategy setting.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 20
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hebarc:18448

DOI: 10.22004/ag.econ.18448

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