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Abstract
The emission of greenhouse gases, particularly carbon dioxide, and the consequent
potential for climate change are the focus of increasing international concern. Temporary
land-use change and forestry projects (LUCF) can be implemented to offset
permanent emissions of carbon dioxide from the energy sector. Several approaches
to accounting for carbon sequestration in LUCF projects have been proposed. In the
present paper, the economic implications of adopting four of these approaches are
evaluated in a normative context. The analysis is based on simulation of Australian
farm–forestry systems. Results are interpreted from the standpoint of both investors
and landholders. The role of baselines and transaction costs are discussed.