Policy design for forest carbon sequestration: A review of the literature
Open accessAbstract
Forest carbon enhancement provides a low-cost opportunity in climate policy, but needs efficient policy design to be implemented. This paper reviews studies in economics on efficient design of policies for forest carbon sequestration and compares their findings against design systems in practice. Specific design problems are associated with the heterogeneity of landowners, uncertainty, additionality, and permanence in carbon projects. Different types of discounting of the value of the forest carbon sink compared with emissions abatement are suggested in the literature for management of most design problems, together with optimal contract design and emissions baselines for managing additionality and permanence in carbon sequestration. Design systems in practice, where forest carbon corresponds to 0.5% of all carbon volume subject to a pricing mechanism, mainly rely on additionality tests by approved standards on a project-by-project basis, and on buffer credits for management of permanence. Further development of forest carbon sinks as offsets in voluntary and compliance markets can be facilitated by applying tools for contract design and offset baseline management recommended in the literature.
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Permanence, sequestration uncertainty, availability of efficient financing mechanisms, and monitoring, reporting and verification systems are difficulties associated with forest-based abatement projects.
“Permanence, sequestration uncertainty, the availability of efficient financing mechanisms as well as monitoring, reporting and verification systems are all difficulties associated around forest-based abatement projects (Gren and Aklilu 2016).”
From Strategies for mitigation of climate change: a review (2020) · cites this paper as Gren and Aklilu 2016
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- Authors
- Gren, I.-M., & Aklilu, A. Z.
- Affiliations
- Swedish University of Agricultural Sciences (SE)
- Corresponding author
- Gren, Ing-Marie
- Venue
- Forest Policy and Economics
- Publisher
- Elsevier BV
- Published
- 2016-09
- Volume
- 70
- Pages
- 128-136
- ISSN
- 1389-9341 (ISSN-L)
- OpenAlex
- W2420133444
- Cited by
- 179
- References
- 76
- Citations by year
- 2026: 18 · 2025: 29 · 2024: 16 · 2023: 29 · 2022: 20 · 2021: 20 · 2020: 17 · 2019: 12 · 2018: 12 · 2017: 6
- FWCI
- 7.64
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Locations
- Forest Policy and Economics (publishedVersion, cc-by)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- EU-funded project COMPLEX (308601)
- EU/BONUS funded BaltCoast project
- Topics
- Physical Sciences › Environmental Science › Global and Planetary Change › Forest Management and Policy
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Physical Sciences › Environmental Science › Global and Planetary Change › Conservation, Biodiversity, and Resource Management
- Keywords
- forest carbon sequestration, carbon offset markets, policy design, additionality, permanence, discounting, contract design, voluntary carbon markets, compliance carbon markets, uncertainty, carbon pricing
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