Assignment_5_Problem_Set_Solution - 02/24/08 BEE 299...

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02/24/08 BEE 299 Assignment 5 1. Thanks to a change in law, farmers have been giving by the government carbon credits. These credits are given to farmers as an incentive to not till their soil. The credits give the farmers a quota of carbon that they are allowed to emit per acre and so if they don’t plow their soil then they have the carbon credits which they can then sell. This is where the power companies come in. The power companies buy the credits from the farmers which allows them to emit carbon dioxide without getting taxed for them. So it benefits both parties. The price is $3- 5 now because there is not an established market for the credits so far. The price allows both parties to benefit. 2. The farmers agree to this payment because it is win win. It benefits them in many ways. By not tilling, they save time and money, and get money from the people that buy the credits. It increases their productivity, is more efficient, and gives the farmers extra income. Not tilling even helps to stop water runoff, it is weird that farmers haven’t done this before. I would
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Assignment_5_Problem_Set_Solution - 02/24/08 BEE 299...

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