Scheme for Soil Carbon Credits

Design and Cost of a Measuring and Monitoring Scheme for Soil Carbon Credits : 

Design and Cost of a Measuring and Monitoring Scheme for Soil Carbon Credits John Antle Dept of Ag Econ & Econ Montana State University www.climate.montana.edu

Collaborators : 

Collaborators Sian Mooney Dept. Agricultural and Applied Economics University of Wyoming Susan Capalbo Dept. Agricultural Economics and Economics Montana State University Keith Paustian Natural Resource Ecology Laboratory Colorado State University

Advertising : 

Advertising Papers available at www.climate.montana.edu: Mooney, S., J.M. Antle, S.M. Capalbo, and K.H. Paustian. 2002. “Contracting for Soil Carbon Credits: Design and Costs of Measurement and Monitoring.” Unpublished ms. Antle, J.M., S.M. Capalbo, S. Mooney, E.T. Elliott, and K.H. Paustian. 2002. “Spatial Heterogeneity, Contract Design, and the Efficiency of Carbon Sequestration Policies for Agriculture.” Forthcoming in Journal of Environmental Economics and Management.

Study Objectives : 

Study Objectives Develop a measurement protocol for C credits sequestered in agricultural soils Estimate its cost for a region of the US Examine characteristics that influence measurement costs

Influence of Contract Design : 

Influence of Contract Design Contract design will determine monitoring and measurement needs Per-hectare contract Per-credit contract $MM=$monitoring practice+$measuring C

Measurement Issues : 

Measurement Issues Several producers – cover large area Statistical sampling $M=f(#samples,$/sample,frequency) Combine field measurements and predictive models

Measurement - General : 

Measurement - General Predictive biophysical models – estimate C Measure baseline – statistical sampling/field samples/lab testing Measure C periodically over duration of contract Measure C at end of contract

Measurement - Specific : 

Measurement - Specific Stratified random sampling Sample population – producers with contracts to supply C-credits Strata based on crop system change Cost/sample $16.37 Frequency – 4 times Years 1, 5, 10, 20.

Study Area : 

Study Area Field level production data Climate, soil and biophysical characteristics

Models : 

1. #producers participating 2. #producers in each strata 3. Opportunity cost of system changes Models Econometric Models (output supply, input demand) Century Ecosystem Model (NREL) Land use simulation -stochastic output and input prices -policy designs and payment levels parameter estimates carbon estimates

Cost per credit (5% , 95% confid) : 

Cost per credit (5% , 95% confid)

C Change Variability and Cost per Credit : 

C Change Variability and Cost per Credit Coefficient of Variation in C Changes Cost/credit 52H 52L 53H 53l 58H 58L Variability Decreasing

Conclusions : 

Conclusions Measurement costs not large enough to prevent producers from participating in C market Efficiency of measurement protocol depends on the price of credits Measurement costs largest in spatially heterogeneous areas

Other issues : 

Other issues Uncertainty associated with initial C change estimates (see other paper on web) Baseline – will change costs per credit