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https://hdl.handle.net/1959.11/12496
Title: | Transaction costs of carbon offset projects: A comparative study | Contributor(s): | Cacho, Oscar J (author) ; Lipper, Leslie (author); Moss, Jonathan (author) | Publication Date: | 2013 | DOI: | 10.1016/j.ecolecon.2012.12.008 | Handle Link: | https://hdl.handle.net/1959.11/12496 | Abstract: | The land-use change and forestry sector can be a cost-effective contributor to climate mitigation in at least three ways: providing carbon offsets through carbon sequestration in biomass and soils, reducing emissions of methane and other greenhouse gases, and producing biofuels that replace fossil fuels. The presence of carbon markets should help encourage these activities; however, most carbon trades to date have occurred in the energy sector. A major obstacle to carbon trades from land-use systems is the presence of high transaction costs of converting a carbon offset into a tradable commodity, so the prevailing market carbon prices may not provide enough incentive for adoption. This paper presents a model of the exchange of carbon offsets between a project developer and a group of landholders. The model is solved to derive project feasibility frontiers that show the minimum number of contracts necessary to make a project feasible at any given carbon price. The model is applied to two case studies (smallholder agroforestry in Indonesia and partial reforestation of family farms in Australia) under two types of contract (purchase of carbon flows and rental of carbon stocks). The paper concludes by identifying possible strategies to reduce transaction costs while maintaining project integrity. | Publication Type: | Journal Article | Source of Publication: | Ecological Economics, v.88, p. 232-243 | Publisher: | Elsevier BV | Place of Publication: | Netherlands | ISSN: | 1873-6106 0921-8009 |
Fields of Research (FoR) 2008: | 140205 Environment and Resource Economics 140201 Agricultural Economics |
Fields of Research (FoR) 2020: | 380105 Environment and resource economics 380101 Agricultural economics |
Socio-Economic Objective (SEO) 2008: | 910206 Market-Based Mechanisms 960302 Climate Change Mitigation Strategies |
Socio-Economic Objective (SEO) 2020: | 150506 Market-based mechanisms 190301 Climate change mitigation strategies |
Peer Reviewed: | Yes | HERDC Category Description: | C1 Refereed Article in a Scholarly Journal |
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Appears in Collections: | Journal Article |
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