Economics of Sequestering Carbon in the U.S. Agricultural Sector
Jan Lewandrowski, Mark Peters, Carol Jones, Robert House, Mark Sperow, Marlen Eve, and Keith Paustian
Technical Bulletin No. (TB-1909) 69 pp,
April 2004
Atmospheric concentrations of greenhouse gases can be reduced by withdrawing carbon from the atmosphere and sequestering it in soils and biomass. This report analyzes the performance of alternative incentive designs and payment levels if farmers were paid to adopt land uses and management practices that raise soil carbon levels. At payment levels below $10 per metric ton for permanently sequestered carbon, analysis suggests landowners would find it more cost effective to adopt changes in rotations and tillage practices. At higher payment levels, afforestation dominates sequestration activities, mostly through conversion of pastureland. Across payment levels, the economic potential to sequester carbon is much lower than the technical potential reported in soil science studies. The most cost-effective payment design adjusts payment levels to account both for the length of time farmers are willing to commit to sequestration activities and for net sequestration. A 50-percent cost-share for cropland conversion to forestry or grasslands would increase sequestration at low carbon payment levels but not at high payment levels.
Keywords: Carbon sequestration, greenhouse gas mitigation, afforestation, no-till, incentive design, leakage, carbon stock, permanence, ERS, USDA
In this report ... Chapters are
in Adobe Acrobat PDF format.
- Abstract, Acknowledgment, and Contents, 76 kb
- Summary, 49 kb
- Chapter 1: Introduction, 51 kb
- Chapter 2: Conceptual Issues, 147 kb
- Chapter 3: Literature Review, 65 kb
- Chapter 4: Empirical Framework, 542 kb
- Chapter 5: Empirical Analysis, 135 kb
- Chapter 6: Summary of Findings and Implications for Policy, 63 kb
- References, 51 kb
- Appendix 1, 65 kb
- Appendix 2, 63 kb
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Updated date: March 31, 2004
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