• Working Paper

Estimating Leakage from Forest Carbon Sequestration Programs


Murray, B. C., McCarl, B. A., & Lee, H. (2002). Estimating Leakage from Forest Carbon Sequestration Programs.


Leakage from forest carbon sequestration—the amount of a program’s direct carbon benefits undermined by carbon releases elsewhere—depends critically on demanders’ ability to substitute non-targeted timber for timber targeted by the program. Analytic, econometric, and sector-level optimization models are combined to estimate leakage from different forest carbon sequestration activities. Empirical estimates for the U.S. show leakage ranges from minimal (90 percent), depending on the activity and region. Importantly, and counter to common perceptions, the proportion of a project’s carbon benefits undermined by leakage is not proportionally small just because the project itself is small.