Sensitivity of Carbon Sequestration Costs to Economic and Biological Uncertainties

Abstract

Modifying current agricultural management practices as a means of sequestering carbon has been shown to be a relatively low cost way to offset greenhouse gas emissions. In this paper, we examine the sensitivity of the estimates of the amount of soil carbon sequestered and the costs of sequestering carbon to uncertainties in the underlying economic and biological parameters of the modeling framework and to scale of analysis. An application is made to the dryland grain production systems of the US northern Great Plains under a per-hectare payment policy. We show that the resulting changes in the marginal costs and corresponding quantities of soil carbon sequestered are a nonlinear function of the changes in the soil carbon rates, yields, or economic parameters, and depend upon the spatial heterogeneity of the area. The analysis of changes in yields supports the argument that sequestering soil C could be a long-term win-win situation for producers and society. In the short run, providing incentives to producers to switch production practices in order to sequester soil C could lead to higher productivity in the long run that would induce farmers to maintain these practices without incentives.