Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders

Arbeitspapier

Agroforestry projects have the potential to help mitigate global warming by acting as sinks for greenhouse gasses. However, participation in carbon-sink projects may be constrained by high costs. This problem may be particularly severe for projects involving smallholders in developing countries. Of particular concern are the transaction costs incurred in developing projects, measuring, certifying and selling the carbon-sequestration services generated by such projects. This paper addresses these issues by analysing the implications of transaction and abatement costs in carbon-sequestration projects. A model of project participation is developed, which accounts for the conditions under which both buyers and sellers would be willing to engage in a carbon transaction that involves a long-term commitment. The model is used to identify critical project-design variables (minimum project size, farm price of carbon, minimum area of participating farms). A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the transaction costs imposed by the Clean Development Mechanism of the Kyoto Protocol affect project feasibility.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 27.2007

Classification and Topics

• Classification: Wirtschaft ; Renewable Resources and Conservation: Forestry ; Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology ; Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
• Subject: Agroforestry ; Climate Policy ; Carbon Sequestration Costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cacho, Oscar ; Lipper, Leslie
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/74052
• Last update: 10.03.2025, 11:44 AM CET