Carbon supply elasticity and determinants of farmer carbon farming decisions

Abstract

This paper analyzed farmers' willingness to accept (WTA) payment and uncertainties toward carbon market through a 2021 U.S. Midwest farmer survey. The findings showed that farmer carbon supply was elastic at intermediate prices ($20–50/Mg), but inelastic at low ($10–20/Mg) and high ($50–70/Mg) price levels. While perceived co-benefits play significant roles in promoting participation at low-price levels, variables such as age, education, farm size, and soil quality are more likely to influence producers' choices at intermediate- and high-price levels. To enhance farmers' support for carbon programs, measures should be taken to improve benefit, while reducing cost and uncertainty.