Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function

38 Pages Posted: 8 Jan 2005

See all articles by Andrew Plantinga

Andrew Plantinga

Oregon State University

Ruben N. Lubowski

Environmental Defense Fund

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

Date Written: January 2005

Abstract

When and if the United States chooses to implement a greenhouse gas reduction program, it will be necessary to decide whether carbon sequestration policies - such as those that promote forestation and discourage deforestation - should be part of the domestic portfolio of compliance activities. We investigate the cost of forest-based carbon sequestration. In contrast with previous approaches, we econometrically examine micro-data on revealed landowner preferences, modeling six major private land uses in a comprehensive analysis of the contiguous United States. The econometric estimates are used to simulate landowner responses to sequestration policies. Key commodity prices are treated as endogenous and a carbon sink model is used to predict changes in carbon storage. Our estimated marginal costs of carbon sequestration are greater than those from previous engineering cost analyses and sectoral optimization models. Our estimated sequestration supply function is similar to the carbon abatement supply function from energy-based analyses, suggesting that forest-based carbon sequestration merits inclusion in a cost-effective portfolio of domestic U.S. climate change strategies.

Keywords: abatement, carbon, climate change, costs, forestry, greenhouse gases, land use, land-use change, sequestration

JEL Classification: Q54, Q23, Q24, Q15

Suggested Citation

Plantinga, Andrew J. and Lubowski, Ruben N. and Stavins, Robert N., Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function (January 2005). Available at SSRN: https://ssrn.com/abstract=645061 or http://dx.doi.org/10.2139/ssrn.645061

Andrew J. Plantinga

Oregon State University ( email )

232B Ballard Extension Hall
Corvallis, OR 97331-4501
United States

Ruben N. Lubowski

Environmental Defense Fund ( email )

New York, Nat'l Headquarters
257 Park Avenue South
New York, NY 10010
United States

Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1820 (Phone)
617-496-3783 (Fax)

Resources for the Future

1616 P Street, NW
Washington, DC 20036
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National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

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