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Food-Carbon Trade-offs between Agriculture and Reforestation Land Uses under Alternate Market-based Policies

Stacey Paterson, CSIRO Ecosystem Sciences; University of Adelaide
Brett Anthony Bryan, CSIRO Ecosystem Sciences


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Understanding the effects of payments on the adoption of reforestation in agricultural areas and the associated food-carbon trade-offs is necessary to inform climate change policy. Economic viability of reforestation under payment per hectare and payment per tonne schemes for carbon sequestration was assessed in a region in southern Australia supporting 6.1 Mha of rain-fed agriculture. The results show that under the median scenario, a carbon price of 27 A$/tCO2-e could make one-third of the study area (nearly 2 Mha) more profitable for reforestation than agriculture, and at 58 A$/tCO2-e all of the study area could become more profitable. The results were sensitive to variation in carbon risk factor, establishment costs, and discount rates. Pareto-optimal land allocation could realize one-third of the potential carbon sequestration from reforestation (16.35 MtCO2-e/yr at a carbon risk factor of 0.8) with a loss of less than one-tenth (107.89 A$M/yr) of the agricultural production. Both payment schemes resulted in efficiencies within 1% of the Pareto-optimum. Understanding food-carbon trade-offs and policy efficiencies can inform carbon policy design.

Key words

agriculture; agroecosystem; carbon sequestration; ecosystem services; food security; land use; payment; policy; reforestation

Copyright © 2012 by the author(s). Published here under license by The Resilience Alliance. This article  is under a Creative Commons Attribution-NonCommercial 4.0 International License.  You may share and adapt the work for noncommercial purposes provided the original author and source are credited, you indicate whether any changes were made, and you include a link to the license.

Ecology and Society. ISSN: 1708-3087