Transaction and Abatement Costs of Carbon-Sink Projects in Developing Countries.

TitleTransaction and Abatement Costs of Carbon-Sink Projects in Developing Countries.
Publication TypeJournal Article
Year of Publication2005
AuthorsCacho OJ, Marshal GR, Milne M
ContactAuthorasb@cgiar.org
JournalEnvironment and Development Economics
Volume10
Issue5
Pagination1-18
Keywordscarbon, carbon sink, Carbon stocks, CO2, forests, global warming, greenhouse gasses, Indonesia, land use
AbstractProjects in the forestry sector, and land-use change and forestry projects more generally, have the potential to help mitigate global warming by acting as sinks for greenhouse gasses, particularly CO2. However, concerns have been expressed that 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 reviewing the implications of transaction and abatement costs in carbon-sequestration projects. An approach to estimating abatement costs is demonstrated through four case studies of agroforestry systems located in Sumatra, Indonesia. A typology of transaction costs is presented and related to existing pilot projects. The paper concludes with recommendations to reduce the disadvantages that smallholders may face in capturing the opportunities offered by carbon markets.
URLhttp://ideas.repec.org/a/cup/endeec/v10y2005i05p597-614_00.html