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Payment for carbon sequestration by agriculture and forestry can provide incentives for adoption ofsustainable agricultural practices. However, a project involving contracts with farmers may face hightransaction costs in showing that net emission reductions are real and attributable to the project. Thispaper presents a model of project participation that includes transaction and abatement costs. A projectfeasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for anygiven market price of carbon. The PFF is used to analyse how the design of a climate mitigationprogram may affect the feasibility of actual projects.

Keywords: Climate Policy ; Greenhouse Effect ; Carbon Sequestration ; Agroforestry ; Transaction Costs

Subject(s): Environmental Economics and Policy

Issue Date: 2008

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 17

Series Statement: Conference Paper

Record appears in: Australian Agricultural and Resource Economics Society (AARES) > 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia

Autor: Cacho, Oscar J.


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