Institutions and the Value of Nonpoint Source Measurement Technology: Carbon Sequestration in Agricultural Soils

Lyubov A. Kurkalova, Catherine L. Kling, Jinhua Zhao
July 2003  [03-WP 338]

The development of technologies for accurate field-scale carbon assessment allows the implementation of more efficient policies than can be implemented in their absence. We estimate the value of accurate measurement technology by estimating the gains from implementing a more efficient policy, one that targets carbon reductions at the field scale but requires accurate field-scale measurement technology, relative to a practice-based policy that can be implemented in the absence of such technology. We find large cost savings due to improved targeting of conservation tillage subsidies for the state of Iowa. The cost savings depend significantly on the choice of baseline carbon, while the ability of the government to cost discriminate has little impact on the value of accurate measurement technology.

Keywords: carbon sequestration, green payment policy, value of measurement technology.

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