Repository logo
 

Realizing the social value of impermanent carbon credits

Accepted version
Peer-reviewed

Type

Article

Change log

Abstract

Efforts to avert dangerous climate change by conserving and restoring natural habitats are hampered by concerns over the credibility of methods used to quantify their long-term impacts. We develop a novel, flexible framework for estimating the net social benefit of impermanent nature-based interventions that integrates three substantial advances: (1) conceptualising the permanence of a project’s impact as its additionality over time; (2) risk-averse estimation of the social cost of future reversals of carbon gains; and (3) post-credit monitoring to correct errors in deliberately pessimistic release forecasts. Our framework generates incentives for safeguarding already-credited carbon while enabling would-be investors to make like-for-like comparisons of diverse carbon projects. Preliminary analyses suggest nature-derived credits may be competitively priced even after adjusting for impermanence.

Description

Keywords

35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour

Journal Title

Nature Climate Change

Conference Name

Journal ISSN

1758-678X
1758-6798

Volume Title

Publisher

Springer Science and Business Media LLC
Sponsorship
The Royal Society, ESRC, NERC, Grantham Research Institute on Climate Change and the Environment, Frank Jackson Trust, Dragon Capital, and the Tezos Foundation