The Demand for Voluntary Carbon Sequestration

With the increasing recognition of forest measures as a complement to conventional carbon emissions avoidance technologies it is important to understand the market valuation of local forest carbon sinks for climate change mitigation. The paper presented in this QUEST Seminar conducts a framed-field experiment among a Germany-wide sample to provide a revealed preference study on the individual willingness to pay (WTP) for carbon sequestration through afforestation. The authors focus on the role of local co-benefits of climate protection activities. In addition, they add geo-data to our experimental data to analyze the impact of spatial variation on the individual WTP. The paper finds that the WTP for carbon removal exceeds the WTP for mitigation efforts found in previous studies. While spatial distance does affect the likelihood to contribute to a local carbon sink, it does not affect the average amount given. Additional survey data find that trust in forest measures is higher compared to mitigation via an emissions trading scheme, which could explain the comparably high WTP.