Temporary Sequestration Credits : An Instrument for Carbon Bears

• Ngôn ngữ: eng
• Ký hiệu phân loại: 551.75 Carboniferous and Permian periods
• Thông tin xuất bản: World Bank, Washington, DC, 2014
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 307571
• Chủ đề: 1. AGROFORESTRY; 2. CARBON REDUCTION STRATEGIES; 3. PLANTATIONS; 4. SEQUESTRATION; 5. SULPHUR DIOXIDE

Tóm tắt

Temporary crediting of carbon storage is a proposed instrument that allows entities with emissions reductions obligations to defer some obligations for a fixed period of time. This instrument provides a means of guaranteeing the environmental integrity of a carbon sequestration project. But because the user of the temporary credit takes on the liability of renewing it, or replacing it with a permanent credit, the temporary credit must sell at a discount compared with a permanent credit. The authors show that this discount depends on the expected change in price of a permanent credit. Temporary credits have value only if restrictions on carbon emissions are not expected to tighten substantially. The intuition is illustrated by assessing the value of a hypothetical temporary sulfur dioxide sequestration credit using historical data on actual sulfur dioxide allowance prices.