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What Makes Carbon Work? A Sensitivity Analysis of Factors Affecting Forest Offset Viability

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Early implementation experience and a handful of empirical analyses in the literature indicate that the supply of forest carbon offsets may be constrained by, among other factors, transaction costs, access to markets, and carbon accounting rules and regulations. To more fully explore this issue, we use a forest growth and carbon accounting model to assess the relative influence of several key accounting, financial, and market variables on forest carbon offset project viability. We find that project performance, indicated by sequestration rate and project profitability, varies widely across the three project/forest type combinations evaluated here. The effects of carbon price and project length vary in both magnitude and direction from project to project. Project accounting considerations, including baseline establishment method and deductions for “leakage” and other factors, tend to figure prominently in each project, but vary in their absolute effect. These initial results suggest that choice of accounting protocol is a critical decision facing landowners considering forest offset projects. Results also suggest that a one-size-fits-all accounting approach may fail to maximize either landowner participation or the representation of forest types or management systems.

Keywords: carbon; forest offset; project accounting

Document Type: Research Article


Publication date: October 1, 2012

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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