Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-24T03:47:09.607Z Has data issue: false hasContentIssue false
  • English
  • Français

Evaluating a tax-based subsidy approach for forest carbon sequestration

Published online by Cambridge University Press:  13 March 2017

SEONG-HOON CHO ,
JUHEE LEE ,
ROLAND K. ROBERTS ,
BURTON C. ENGLISH ,
EDWARD T. YU ,
TAEYOUNG KIM  and
PAUL R. ARMSWORTH
SEONG-HOON CHO*
Affiliation:
University of Tennessee – Agricultural and Resource Economics, 2621 Morgan Circle, Knoxville, Tennessee 37996, USA
JUHEE LEE
Affiliation:
University of Tennessee – Agricultural and Resource Economics, 2621 Morgan Circle, Knoxville, Tennessee 37996, USA
ROLAND K. ROBERTS
Affiliation:
University of Tennessee – Agricultural and Resource Economics, 2621 Morgan Circle, Knoxville, Tennessee 37996, USA
BURTON C. ENGLISH
Affiliation:
University of Tennessee – Agricultural and Resource Economics, 2621 Morgan Circle, Knoxville, Tennessee 37996, USA
EDWARD T. YU
Affiliation:
University of Tennessee – Agricultural and Resource Economics, 2621 Morgan Circle, Knoxville, Tennessee 37996, USA
TAEYOUNG KIM
Affiliation:
Gyeongsang National University – Food and Resource Economics, Jinju, Republic of Korea
PAUL R. ARMSWORTH
Affiliation:
University of Tennessee – Ecology and Evolutionary Biology, Knoxville, Tennessee, USA
*
*Correspondence: Professor Seong-Hoon Cho e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Summary

Forest carbon sequestration plays an important role in reducing the build-up of greenhouse gases that are known to contribute to global climate change. However, private landowners will supply less carbon sequestration than would be socially desirable if they are unable to capture the economic value of sequestration. We examine the viability of offering landowners property tax subsidies for forest carbon sequestration (referred to as a ‘tax-based subsidy approach’). Waiving property taxes on forestland provides incentives for landowners to afforest non-forested land and/or sustain forests that are at risk of deforestation. We focus on 17 Tennessee counties and one Kentucky county, constituting one of 179 Bureau of Economic Analysis areas in the United States, as a case study. Higher forestland net return from waiving property taxes increases the share of forestland in the 18 counties, which in turn increases the accumulation of carbon in the forest ecosystem, suggesting that this is a viable approach. The annualized county-level cost of supplying forest carbon sequestration using a tax-based subsidy ranges between US$15.56 and US$563.58 per carbon tonne across the 18 counties. Relevant government agencies can use these estimates to target selected counties for more cost-effective adoption of the county-level tax-based subsidy approach.

Keywords

forest carbon sequestrationincentive paymenttax-based subsidy
Type
Papers
Information
Environmental Conservation , Volume 44 , Issue 3 , September 2017 , pp. 234 - 243
Copyright
Copyright © Foundation for Environmental Conservation 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Supplementary material can be found online at https://doi.org/10.1017/S0376892917000078

References

Ahn, S. (2008) How feasible is carbon sequestration in Korea? A study on the costs of sequestering carbon in forest. Environmental and Resource Economics 41: 89–109.Google Scholar
Alig, R., Stewart, S., Wear, D., Stein, S. & Nowak, D. (2010) Conversions of forest land: trends, determinants, projections, and policy considerations. In: Advances in Threat Assessment and their Application to Forest and Rangeland Management, eds. Pye, J.M., Rauscher, H.M., Sands, Y., Lee, D.C., Beatty, J.S., pp. 1–25. General Technical Report PNW-GTR-802. Portland, OR: USDA Forest Service, Pacific Northwest and Southern Research Stations.Google Scholar
Baldwin, L. & Richards, K.R. (2010) Institutional Support for an International Forest Carbon Sequestration Agreement. Discussion Paper 2010-41. Cambridge, MA: Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School.Google Scholar
CARB (2012) California's Cap and Trade Regulation [www document]. URL http://www.c2es.org/us-states-regions/action/california/cap-trade-regulation Google Scholar
Dinan, T. (2012) Offsetting a Carbon Tax's Costs on Low-Income Households. Working Paper 2012-16. Washington, DC: Congressional Budget Office.Google Scholar
Eagle, J. (2011) Notional generosity: explaining charitable donors’ high willingness to part with Conservation Easements. Harvard Environmental Law Review 35: 47.Google Scholar
ESRI (2012) ArcGIS Help 10.1: Spatial Analyst Toolsets, ArcGIS Resources [www document]. URL http://resources.arcgis.com/en/communities/analysis/ Google Scholar
EC (2016) International Forest Issues: Deforestation [www document]. URL http://ec.europa.eu/environment/forests/deforestation.htm Google Scholar
Fisher, G.W. (1997) The evolution of the American property tax. In: Public Budgeting and Finance, eds. Golembiewski, R.T. & Rabin, J., p. 100. York, UK: Marcel Dekker, Inc.Google Scholar
Government of Brazil (2009) Law #12.187 of 29 December 2009. Diario Oficial da Uniao, #248-A, Secciao 1, 109–110. Brasilia, Brazil: Presidency of the Republic of Brazil Civic House (Executive Office) Legal Affairs Sub-Office.Google Scholar
Greene, W.H. (2012) Econometric Analysis (7th ed.). Boston, MA: Pearson Education.Google Scholar
Hellerstein, D., Higgins, N. & Roberts, M.J. (2015) Options for improving conservation 410 programs: insights from auction theory and economic experiments. USDA Economic Research Report Number 181 [www document]. URL https://www.ers.usda.gov/webdocs/publications/err181/50532_err181.pdf Google Scholar
Hyde, W., Belcher, B. & Xu, J. (2003) China's Forests: Global Lessons from Market Reforms. Washington, DC: Resources for the Future and CIFOR.Google Scholar
IPCC (2014) Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, eds. Pachauri, R.K. & Meyer, L.A., pp. 1–151. Geneva, Switzerland: International Panel on Climate Change.Google Scholar
Jin, G., Li, Z., Lin, Q., Shi, C., Liu, B. & Yao, L. (2015) Land use suitability assessment in low-slope hilly regions under the impact of urbanization in Yunnan, China. Advances in Meteorology 2015: 1–5.Google Scholar
Johnson, K.P. & Kort, J.R. (2004) Redefinition of the BEA economic areas. Survey of Current Business 84: 68–75.Google Scholar
Loehr, D. (2010) External costs as driving forces of land use changes. Sustainability 2: 1035–1054.Google Scholar
Lubowski, R.N., Plantinga, A.J. & Stavins, R.N. (2006) Land-use change and carbon sinks: econometric estimation of the carbon sequestration supply function. Journal of Environmental Economics and Management 51: 135–152.Google Scholar
Markowski-Lindsay, M., Stevens, T., Kittredge, D.B., Butler, B.J., Catanzaro, P. & Dickinson, B.J. (2011). Barriers to Massachusetts forest landowner participation in carbon markets. Ecological Economics 71: 180–190.Google Scholar
Mason, C.F. & Plantinga, A.J. (2011) Contracting for Impure Public Goods: Carbon Offsets and Additionality. National Bureau of Economic Research Working Paper No. 16963 [www document]. URL http://www.nber.org/papers/w16963 Google Scholar
NASS (2014) Pastureland Rent Data [www document]. URL http://quickstats.nass.usda.gov/ Google Scholar
NLCD (2011) U.S. Department of the Interior, U.S. Geological Survey [www document]. URL http://www.mrlc.gov/nlcd11_data.php Google Scholar
NREL (2016) DayCent: Daily Century Model [www document]. URL http://www.nrel.colostate.edu/projects/daycent/ Google Scholar
Nelson, G.C. & Geoghegan, J. (2002) Deforestation and land use change: sparse data environments. Agricultural Economics 27: 201–216.Google Scholar
Pagiola, S. (2005) Assessing the Efficiency of Payments for Environmental Services Programs: A Framework for Analysis. Washington, DC: World Bank.Google Scholar
Parton, B., Ojima, D., Del Grosso, S. & Keough, C. (2001) CENTURY tutorial. CENTURY Users’ Manual [www document]. URL www.nrel.colostate.edu/projects/century/century_tutorial.doc Google Scholar
Peng, C., Apps, M.J., Price, D.T., Nalder, I.A. & Halliwell, D.H. (1998) Simulating carbon dynamics along the boreal forest transect case study (BFTCS) in central Canada: 1. Model testing. Global Biogeochemical Cycles 12: 381–392.Google Scholar
Pidot, J. (2005) Reinventing Conservation Easements: A Critical Examination and Ideas for Reform. Cambridge, MA: Lincoln Institute of Land Policy.Google Scholar
Plantinga, A.J., Mauldin, T. & Miller, D.J. (1999) An econometric analysis of the costs of sequestering carbon in forests. American Journal of Agricultural Economics 81: 812–824.Google Scholar
Richardson, J.J. (2010) Conservation easements and adaptive management. Sea Grant Law and Policy Journal 3: 31.Google Scholar
Schoettle, F.P. (2003) What public finance do State Constitutions allow? In: Financing Economic Development in the 21st Century, eds. White, S.B., Bingham, R.D. & Hill, E.W., pp. 27–49, Armonk, NY: M.E. Sharpe.Google Scholar
Schomers, S. & Matzdorf, B. (2013) Payments for ecosystem services: a review and comparison of developing and industrialized countries. Ecosystem Services 6: 16–30.Google Scholar
Smith, W.B., Miles, P.D., Perry, C.H. & Pugh, S.A. (2009) Forest Resources of the United States, 2007. General Technical Report WO-78. Washington, DC: USDA Forest Service.Google Scholar
Southeast Exotic Pest Plant Council (2013) Landscaping with Native Plants in Tennessee. Native tree recommendations for Tennessee [www document]. URL www.se-eppc.org/pubs/middle.pdf Google Scholar
Stavins, R.N. & Richards, K.R. (2005) The Cost of U.S. forest-based Carbon Sequestration. Prepared by the Pew Center on Global Climate Change [www document]. URL http://www.c2es.org/publications/cost-us-forest-based-carbon-sequestration Google Scholar
Thornton, P.E., Thornton, M.M., Mayer, B.W., Wilhelmi, N., Wei, Y., Devarakonda, R. & Cook, R.B. (2014) Daymet: Daily Surface Weather Data on a 1-km Grid for North America, Version 2. Prepared by Oak Ridge National Laboratory Distributed Active Archive Center, Oak Ridge, Tennessee, USA [www document]. URL http://daac.ornl.gov Google Scholar
USDA (2014) Nez Perce–Clearwater National Forests Forest Plan Assessment. 4.0 Baseline Assessment of Carbon Stocks [www document]. URL http://www.fs.usda.gov/Internet/FSE_DOCUMENTS/stelprd3796950.pdf Google Scholar
USDA-NRCS (2012) SSURGO database [www document]. URL http://www.nrcs.usda.gov/wps/portal/nrcs/site/soils/home/ Google Scholar
USEPA (2012) Carbon Sequestration through Reforestation. A Local Solution with Global Implications [www document]. URL https://semspub.epa.gov/work/HQ/176034.pdf Google Scholar
USEPA (2013) Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2011. EPA 430-R-13-001. URL [www document]. https://www3.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2013-Main-Text.pdf Google Scholar
USGS (2013) Gap analysis program: protected areas database of the United States (PADUS), version 1.3 Combined feature class [www document]. URL http://gapanalysis.usgs.gov/padus/data/ Google Scholar
UTIA (2014) Field Crop Budgets [www document]. URL http://economics.ag.utk.edu/budgets/2014/2014RowCropBudgets.pdf Google Scholar
Yang, F., Zeng, G., Du, C., Tang, L., Zhou, J. & Li, Z. (2008). Spatial analyzing system for urban land-use management based on GIS and multi-criteria assessment modeling. Progress in Natural Science 18: 1279–1284.Google Scholar
Supplementary material: File

Cho supplementary material

Cho supplementary material 1

Download Cho supplementary material(File)
File 71.4 KB