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Incentives for reforestation of agricultural land: What will a market for carbon sequestration credits contribute?

Published online by Cambridge University Press:  30 October 2009

Leonard Shabman ,
Laura Zepp ,
Lisa Wainger  and
Dennis King
Leonard Shabman*
Affiliation:
Professor and Research Associate, respectively, Department of Agricultural and Applied Economics, Virginia Tech.Blacksburg Virginia
Laura Zepp
Affiliation:
Professor and Research Associate, respectively, Department of Agricultural and Applied Economics, Virginia Tech.Blacksburg Virginia
Lisa Wainger
Affiliation:
Assistant Research Scientist and Senior Research Scientist, respectively, Center for Environmental Science, University of Maryland, Solomons, Maryland.
Dennis King
Affiliation:
Assistant Research Scientist and Senior Research Scientist, respectively, Center for Environmental Science, University of Maryland, Solomons, Maryland.
*
L. Shabman ([email protected]).
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Abstract

Reforestation of frequently flooded, marginally productive agricultural lands may provide environmental benefits. However, for reforestation to occur private landowners must earn enough revenues from forestlands to offset both the costs of reforesting as well as any forgone agricultural income. Among the possible revenue sources is the sale of carbon sequestration credits earned from reforestation. We simulate the financial feasibility of reforestation and the contribution of carbon sequestration credit sales to the net income possible from reforestation in a case study area of frequently flooded soybean fields in the Mississippi Alluvial Plain (the Delta). Under current market conditions, reforestation appears to be financially feasible on only the most marginally productive agricultural lands. Markets for carbon credits may contribute to positive financial returns of reforestation, but other policies and market opportunities will be necessary for a positive return to be realized.

Keywords

carbon credit pricesfinancial feasibilityflooded landshunting lease paymentstimber revenueswater quality improvement
Type
Research Article
Information
American Journal of Alternative Agriculture , Volume 17 , Issue 3 , September 2002 , pp. 116 - 124
Copyright
Copyright © Cambridge University Press 2002

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