Carbon credits compete poorly with agricultural commodities in an optimized model of land use in Northern California

Nascent U.S. carbon markets reward farmers for reforesting agricultural land, with consequent ecological co-benefits. We use a dynamic optimization model to determine the likelihood of an orchard farmer in northern California converting to forest under 90 plausible future scenarios. We find reforestation to be a highly unlikely outcome, occurring only 18.5% of the time under the most favorable assumptions. Conversion to “carbon farming” was more sensitive to agricultural production costs than to carbon policy changes. In the absence of other changes, the price of carbon would have to increase nearly a hundredfold to make reforestation compete economically with orchard agriculture. Our results partly explain low participation in the reforestation sector of the U.S. compliance market for carbon. We conclude that farmers will not be interested in forest conversion unless their land has limited agricultural potential or they are motivated by social, rather than