Skip to main content

Economic consequences of consideration of permanence, leakage and additionality for soil carbon sequestration projects


This paper introduces, explains, and describes methods for addressing the issues of permanence, leakage, and additionality (PLA) of agricultural soil carbon sequestration (ASCS) activities at the project level. It is important to cast these as project-level issues, because they relate to the integrity and consistency of using location-specific ASCS projects as an offset against GHG emissions generated in other sectors (e.g., energy). The underlying objective is to understand and quantify what the net carbon benefits of an ASCS project are once we account for the fact that (1) the sequestered carbon may be stored impermanently, (2) the project may displace emissions outside the project boundaries (leakage), and (3) the project’s carbon sequestration may not be entirely additional to what would have occurred anyway under business-as-usual (no project) conditions. This article evaluates methods for identifying and estimating PLA and gauges the potential magnitude of these effects on the economic returns to a project.

This is a preview of subscription content, access via your institution.


  1. Adams DM, Alig RJ, McCarl BA, Callaway JM, Winnett SM (1999) Minimum cost strategies for sequestering carbon in forests. Land Econ 75(3):360–374

    Article  Google Scholar 

  2. Alig R, Adams D, McCarl B, Callaway JM, Winnett S (1997) Assessing effects of carbon mitigation strategies for global climate change with an intertemporal model of the U.S. Forest and Agriculture Sectors. Environ Resour Econ 9:259–274

    Article  Google Scholar 

  3. Bausell CW, Belsey DA, Smith SL (1992) An analysis of 1980s dairy programs and some policy implications. Am J Agri Econ 74(3):605–616

    Article  Google Scholar 

  4. Blanco J, Forner C (2000) Special considerations regarding the ‘Expiring CERs’ proposal, the Ministry of the Environment, Colombia, for presentation to the International Forum on Enhancement of Japan’s Private Sector’s Re-afforestation Cooperation

  5. Brown S, Masera O, Sathaye J et al. (2000) Project-based activities. In: Watson RT et al. (eds.) Land use, land use change, and forestry, intergovernmental panel on climate change. Cambridge University Press, Cambridge, pp 283–338

    Google Scholar 

  6. Choi S (2004) The potential and cost of carbon sequestration in agricultural soils: Empirical study of dynamic model in the midwestern U.S. PhD Thesis, Department of Agricultural, Environmental, and Development Economics, The Ohio State University

  7. Chomitz KM (2000) Evaluating carbon offsets from forestry and energy projects: How do they compare? World Bank Policy Research Working Paper 2357, New York, p 25

  8. Colombia Ministry of the Environment (2000) Expiring CERs, a proposal to addressing the permanence issue. In: United Nations Framework Convention on Climate Change. UN-FCCC/SBSTA/2000/MISC.8, pp 23–26. Available at

  9. Conservation Technology Information Center (CTIC) (2004) National crop residue management survey conservation tillage data. Conservation Technology Information Center, Purdue University. West Lafayette, IN, Available at

  10. Dick WA, Edwards WM, McCoy EL (1997) Continuous application of no-tillage to Ohio soils: Changes in crop yields and organic matter-related soil properties. In: Paul EA, Paustian K, Elliott ET, Cole CV (eds.) Soil organic matter in temperate ecosystems: Long-term experiments in North America. CRC, Boca Raton

    Google Scholar 

  11. Dixon BL, Susanto D, Berry CR (1991) Supply impact of the milk diversion and dairy termination programs. Am J Agri Econ 73(3):633–640

    Article  Google Scholar 

  12. Dutschke M (2001) Permanence of CDM Forests or Non-permanence of Land use-related Carbon Credits? Hamburgisches Welt-Wirtschafts-Archiv (HWWA) Discussion Paper #134. Available at

  13. Dutschke M (2002) Fractions of permanence — Squaring the cycle of sink carbon accounting. Mitig Adapt Strategies Glob Chang 7:381–402

    Article  Google Scholar 

  14. Hardie IW, Parks PJ (1997) Land use with heterogeneous quality: An application of an area base model. Am J Agri Econ 77:299–310

    Article  Google Scholar 

  15. Herzog H, Caleira K, Reilly J (2003) An issue of permanence: Assessing the effectiveness of temporary carbon storage. Clim Change 59(3):293–310

    Article  Google Scholar 

  16. Intergovernmental Panel on Climate Change (IPCC) (1996) Revised 1996 Guidelines for National Greenhouse Gas Inventories. In: Houghton JT, Meira Filho LG, Lim B, Treanton K, Mamaty I, Bonduki Y, Griggs DJ, Callander BA (eds.) IPCC/OECD/IEA

  17. Janosky J, Young D, Schillinger W (2002) Economics of conservation tillage in a wheat–fallow rotation. Pacific Northwest Conservation Tillage Handbook Series No. 16, Chapter 10 — New Technology Access, Adaptation and Economics. PNWSTEEP. URL:

  18. Keeler A (2005) Sequestration rental policies and price path of carbon. Climate Policy 4(4):419–425

    Article  Google Scholar 

  19. Kim M (2004) Economic investigation of discount factors for agricultural greenhouse gas emission offsets. PhD dissertation, Department of Agricultural Economics, Texas A&M University

  20. Lal R, Kimble JM, Follett RF, Cole CV (1998) The potential of U.S. cropland to sequester carbon and mitigate the greenhouse effect. Ann Arbor Press, Ann Arbor

    Google Scholar 

  21. Marland G, Fruit K, Sedjo R (2001) Accounting for sequestered carbon: The question of permanence. Environ Sci Policy 4:259–268

    Article  Google Scholar 

  22. McCarl BA, Schneider UA (2001) Greenhouse gas mitigation in U.S. Agriculture and Forestry. Science 294:2481–2482

    Article  Google Scholar 

  23. Moura Costa P (1996) Tropical forestry practices for carbon sequestration. In: Schulte A, Schone D (eds.) Dipterocarp forest ecosystems—Towards sustainable management. World Scientific, Singapore, pp 308–334

    Google Scholar 

  24. Murray BC (2004) Addressing permanence and leakage of GHG benefits from forest and agricultural projects. Presented at the Third Forestry and Agriculture Greenhouse Gas Modeling Forum, Shepherdstown, WV, October 12–15, 2004.

  25. Murray BC, Sohngen B (2004) Leakage in land use, land use change, and forest sector projects: A synthesis of issues and estimation approaches. Working paper, RTI International, Center for Regulatory Economics and Policy Research, Research Triangle Park, NC

  26. Murray BC, Sommer AJ (2004) Setting baselines for GHG mitigation projects in agriculture, land use change and forestry: A comparison of bottom-up and top-down approaches. Working paper, RTI International, Center for Regulatory Economics and Policy Research, Research Triangle Park, NC

  27. Murray BC, McCarl BA, Lee H (2004) Estimating leakage from forest carbon sequestration programs. Land Econ 80(1):109–124

    Google Scholar 

  28. Noble I, Apps M, Houghton R, Lashof D, Makundi W, Murdiyarso D, Murray B, Sombrock W, Valentini R et al. (2000) Implications of different definitions and generic issues. In: Watson R, Noble I, Bolin B, Ravindranath N, Verado D, Dokkens D (eds.) Land use, land use change, and forestry. Cambridge University Press, Cambridge, UK, pp 53–156

    Google Scholar 

  29. Parton WJ (1996) The CENTURY model. In: Powlson DS, Smith P, Smith JU (eds.) Evaluation of soil organic matter models using existing long-term datasets. Springer, Berlin, Germany, pp 283–293

  30. Pierce FJ, Fortin MC (1997) Long-term tillage and periodic plowing of a no-tilled soil in Michigan: Impacts, yield, and soil organic matter. In: Paul EA, Paustian K, Elliott ET, Cole CV (eds.) Soil organic matter in temperate ecosystems: Long-term experiments in North America. CRC, Boca Raton

    Google Scholar 

  31. Plantinga AJ, Mauldin T, Miller DJ (1999) An econometric analysis of the costs of sequestering carbon in forests. Am J Agri Econ 81:821–824

    Google Scholar 

  32. Roth GW (1996) Crop rotations and conservation tillage. Conservation Tillage Series, Number 1, Pennsylvania State University, Cooperative Extension Service

  33. Schroeder P (1992) Carbon storage potential of short rotation tropical tree plantations. For Ecol Manage 50:31–41

    Article  Google Scholar 

  34. Sohngen B, Brown S (2004) Measuring leakage from carbon projects in open economies: A stop timber harvesting project as a case study. Can J For Res 34:829–839

    Article  Google Scholar 

  35. Sohngen B, Mendelsohn R (2003) An optimal control model of forest carbon sequestration. Am J Agri Econ 85(2):448–457

    Article  Google Scholar 

  36. Stavins RN (1999) The costs of carbon sequestration: A revealed preference approach. Am Econ Rev 89(4):994–1009

    Article  Google Scholar 

  37. Stavins RN, Jaffe AB (1990) Unintended impacts of public investments on private decisions: The depletion of forested wetlands. Am Econ Rev 80(3):337–352

    Google Scholar 

  38. Subak S (2002) Replacing carbon lost from forests: An assessment of insurance, reserves, expiring credits and tonne-years. AAAS Fellow, U.S. Environmental Protection Agency, http://www.EPA/globalwarming/

  39. Watson RT, Noble IR, Bolin B, Ravindranath NH, Verardo DJ, Dokken DJ (eds.) (2000) Land use, land-use change, and forestry. A special report of the IPCC. IPCC, Cambridge University Press, United Kingdom and New York, N.Y., USA

  40. Wigley T, Richels R, Edmonds J (1996) Economic and environmental choices in the stabilization of CO2 concentrations. Nature 379:240–243

    Article  Google Scholar 

  41. Williams JR, Jones CA, Kiniry JR, Spanel DK (1989) The EPIC crop growth model. Trans ASAE 32:497–511

    Google Scholar 

  42. World Resources Institute and World Business Council on Sustainable Development (WRI/WBCSD) (September 2003) The Greenhouse Gas Protocol: Project Quantification Standard. Road Test Draft

  43. Wu JJ (2000) Slippage effects of the conservation reserve program. Am J Agri Econ 82(4):979–992

    Article  Google Scholar 

Download references

Author information



Corresponding author

Correspondence to Brian C. Murray.

Additional information

This work reflects ongoing collaborative efforts of the authors and Bruce McCarl (Texas A&M University), Allan Sommer, Jui-Chen Yang, and Laurel Clayton (RTI International), Sandra Brown (Winrock International), Ken Andrasko and Ben DeAngelo (US EPA), and various participants in the World Resources Institute/World Business Council workgroup to develop GHG project reporting protocols. All opinions, errors and omissions are those of the authors only.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Murray, B.C., Sohngen, B. & Ross, M.T. Economic consequences of consideration of permanence, leakage and additionality for soil carbon sequestration projects. Climatic Change 80, 127–143 (2007).

Download citation


  • Carbon Sequestration
  • Conventional Tillage
  • Conservation Tillage
  • Conservation Reserve Program
  • Agri Econ