The Relative Role of Land in Climate Policy

Replaced with revised version of paper 06/26/09.
Land-based activities are responsible for a large part of global greenhouse gas (GHG) emissions, yet theeconomics of land-use decisions have rarely been explicitly modeled in global mitigation studies. Thispaper integrates the analysis of land use related non-CO2 emissions and carbon forest sequestration withmore conventional analyses of CO2 emissions from fossil fuel combustion to provide a comprehensiveassessment of the relative role of land in global GHG emissions and mitigation. For this paper, we utilizea new general equilibrium framework which effectively captures the opportunity costs of land-usedecisions in agriculture and forestry, the implications of these decisions for GHG emissions, as well asmitigation options in agriculture and forestry. By combining this with a more conventional analysis offossil fuel-based CO2 emissions mitigation, we are able to analyze trade-offs and feedbacks between GHGemissions reductions in land-based and fossil fuel combustion intensive sectors. We explore the generalequilibrium effects when land rents are endogenous and large-scale adoption of mitigation technologiesproduces feedbacks across sectors and regions.