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Factors influencing buyers' willingness to offer price premiums for carbon credits sourced from urban forests

Formally Refereed

Abstract

Marketing carbon offset credits generated by urban forest projects could help cities and local governments achieve their financial self-sufficiency and environmental sustainability goals. Understanding the value of carbon credits sourced from urban forests, and the factors that determine buyers’ willingness to pay a premium for such credits could benefit cities in strategically marketing carbon credits to generate revenue. This study surveyed business organisations participating in carbon trading in order to explore the factors influencing buyers’ willingness to pay for urban forest carbon credits in alternative marketing scenarios (i.e., with and without explicit recognition of purchase). Results suggest that buyers are willing to pay a premium for carbon credits sourced from urban forests and the amount of this premium was influenced by the purchasing business’s ownership type, size, geographical scope of operations, and the level of importance placed on the co-benefits provided by urban trees.

Keywords

price premium, urban forests, ecosystem service, carbon credits, Tobit model.

Citation

Poudyal, Neelam C.; Bowker, J.M.; Siry, Jacek P. 2015. Factors influencing buyers' willingness to offer price premiums for carbon credits sourced from urban forests. International Journal of Sustainable Society 7: 205-220. 16 p.
https://www.fs.usda.gov/research/treesearch/50219