Payments for carbon sequestration services


R. Jindal; J. Kerr

Type of Document:
Research Brief


SANREM CRSP, Virginia Polytechnic Institute and State University

Date of Publication:

Place of Publication:
Blacksburg, VA


Excerpt from Introduction: “Carbon sequestration – the process of removing excess carbon dioxide (CO2) from the atmosphere and storing it on land – helps mitigate global warming. Various land-use changes (no-till agriculture, grasslands) can absorb or sequester carbon. For instance, when barren lands are converted to forest, growing trees sequester CO2 from the atmosphere and store it as woody biomass and soil organic matter. Conversely, when mature forests are replaced by croplands, a large amount of CO2 is released into the atmosphere.

Recent technical innovations allow for accurate measurement of the amount of CO2 sequestered by a given stand of trees or unit of land. This facilitates an arrangement whereby, instead of directly reducing their own carbon emissions, a corporation, a government, or even an individual can invest in projects that sequester carbon on their behalf. They usually buy what are called carbon offsets or carbon credits, each offset being equal to a ton of CO2 (tCO2) removed from the atmosphere. Farmers and landowners (producers) can thus receive payments for land-use practices that generate carbon offsets for these international investors (buyers). Because the effect on the atmosphere is the same regardless of where carbon sequestration takes place, buyers can purchase carbon offsets from anywhere in the world. Demand for carbon sequestration services has rapidly evolved into a global market consisting of two broad segments: legislated and voluntary. Each of these segments can involve either trading in carbon sequestration offsets or a project-based transaction between the end buyer and the producer.”

Additional Bibliographic Information

USAID PES Brief 2.1

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