Core Project: Designing Incentives for Ecosystem Services

Summary

This project is designed to directly address the CWC question, "How is the carbon cycle being disrupted by human activities (e.g., fossil fuel combustion) and how can the cycle be re- balanced to mitigate abrupt climate change (ACC) and its adverse effects?" One of the enduring questions in climate change policy is whether forest, soil, wetland, and other land-based credits will ultimately be available to carbon trading systems. There is strong evidence that if land based carbon sequestration can be implemented, the costs of mitigating climate change could be reduced substantially. Despite this evidence, inclusion of land-based sequestration in the Kyoto Protocol, and the many test-cases implemented around the world, there is currently only one forest-based carbon sequestration project approved by the Clean Development Mechanism. The many obstacles with crediting land-based carbon sequestration include measurement and verification issues, leakage concerns, questions about whether projects are truly "additional," costs, and other market design issues.

This project proposes to build a program that analyzes these policy issues. The funds for the project itself will be utilized for specific research objectives that will enhance our understanding about the efficiency of implementing land-based carbon mitigation policies. The knowledge, experience, and visibility produced by these specific projects will in turn further the development of a larger sustaining program that enhances both practical and academic understanding of using payments for ecosystem service as a key environmental policy tool.

The main questions addressed by this core project are:

  1. Can land-based measures for carbon sequestration be implemented efficiently? How large are implementation costs, including monitoring costs, verification costs, and other transactions costs? Can incentives be designed to minimize these costs?
  2. How important is leakage? Can incentive systems be designed to minimize the amount of leakage associated with carbon sequestration projects or forestry emission reduction projects?
  3. What properties are necessary for efficient contracts for land-based carbon sequestration and how do contracts for carbon sequestration differ from contracts for other services?
  4. Project Status

    The project has made significant progress in a multi-college multi-disciplinary examination of how ecosystem service payments for carbon sequestration services affect greenhouse gas (GHG) stocks and other environmental outcomes. Faculty collaborators from the School of Environment and Natural Resources and the Department of Agricultural, Environmental, and Development Economics Geography, Political Science, and the John Glenn School of Public Affairs (JGSPA) have met regularly and made demonstrable progress in data and modeling for the project.

    Contacts

    Andy Keeler
    John Glenn School of Public Affairs

    Brent Sohngen
    Professor
    Dept. of Agricultural, Environmental and Development Economics