Contracting for Impure Public Goods: Carbon Offsets and Additionality

Charles Mason and Andrew J. Plantinga Plantinga
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Andrew J. Plantinga Plantinga: Department of Agricultural and Resource Economics, Oregon State University

No 2011.13, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important in the use of carbon offsets as part of climate change mitigation. Analyzing optimal contracts for forest carbon sequestration, an important offset category, we conduct a national-scale simulation using results from an econometric model of land-use change. The results indicate that for an increase in forest area of 50 million acres, annual government expenditures with optimal contracts are about $4 billion lower compared than under a uniform subsidy.

Keywords: Carbon Sequestration; Incentive Contracting; Offsets; Additionality (search for similar items in EconPapers)
JEL-codes: D8 L15 Q2 (search for similar items in EconPapers)
Date: 2011-02
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-ene and nep-env
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Contracting for Impure Public Goods: Carbon Offsets and Additionality (2011)
Working Paper: Contracting for Impure Public Goods: Carbon Offsets and Additionality (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2011.13

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