Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53404 
Year of Publication: 
2011
Series/Report no.: 
Nota di Lavoro No. 13.2011
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important in the use of carbon offsets as part of climate change mitigation. Analyzing optimal contracts for forest carbon sequestration, an important offset category, we conduct a national-scale simulation using results from an econometric model of land-use change. The results indicate that for an increase in forest area of 50 million acres, annual government expenditures with optimal contracts are about $4 billion lower compared than under a uniform subsidy.
Subjects: 
Carbon Sequestration
Incentive Contracting
Offsets
JEL: 
Q2
D8
L15
Document Type: 
Working Paper

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