Excerpt
Given the increasing interest in using marketable carbon (C)-credits to reduce atmospheric concentrations of greenhouse gases, many potential purchasers and producers of C-credits in the United States have started to inquire what the price of a C-credit might be. In some cases, the individuals making the inquiry have expectations the price will be fixed, or provided as a subsidy, or charged as a tax, or anticipate prices will mirror the European market. Although subsidies and C taxes may be part of greenhouse gas emission policy, the price of tradable C-credits will be determined in a market by the interaction of demand and supply. There are many factors affecting the demand for, and supply of, C credits and these factors act together to determine C-credit prices.
The potential for sequestering C in agricultural and forestry sinks to generate C-credits has received increased attention by legislative bodies, government and non-government organizations, private firms, farm managers, and universities over the last few years. This increased interest is primarily due to potential national and/or international regulation of greenhouse gas emissions, such as carbon dioxide (CO2), methane and nitrous oxide. Parker (2003) reports four bills …
Footnotes
Jeffery R. Williams is a professor and Jeffrey M. Peterson is an assistant professor in the Department of Agricultural Economics at Kansas State University.
- Copyright 2005 by the Soil and Water Conservation Society
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