Brief Overview of Carbon Sequestration Economics and Policy

The purpose of this paper is to provide an overview of the issues and challenges involved in analyzing the costs and program design for US policies dealing with forest carbon sequestration. Although many of the issues are couched in terms of implementing a US carbon sequestration program, many apply equally well to the design of an international program.

The first section of the paper examines some of the pitfalls of comparing the results of carbon sequestration cost studies and suggests some simple ways which analysts could make their results more useful. The second section of the paper reviews issues related to the implementation of a carbon sequestration program, including which policy tools are available and which have received the most attention, some of the challenges for using those policy tools, and one alternative that has received little attention, but may become necessary. The final section of the paper provides conclusions."