Realizing the social value of impermanent carbon credits

Balmford, Andrew, Keshav, Srinivasan, Venmans, Frank ORCID: 0000-0002-4264-6606, Coomes, David, Groom, Ben ORCID: 0000-0003-0729-143X, Madhavapeddy, Anil and Swinfield, Tom (2023) Realizing the social value of impermanent carbon credits. Nature Climate Change, 13 (11). 1172 - 1178. ISSN 1758-678X

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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. Here we develop a flexible framework for estimating the net social benefit of impermanent nature-based interventions that integrates three substantial advances: (1) conceptualizing 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.

Item Type:	Article
Official URL:	https://www.nature.com/nclimate/
Additional Information:	© 2023 Springer Nature Limited
Divisions:	Grantham Research Institute Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
JEL classification:	Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General
Date Deposited:	14 Nov 2023 09:51
Last Modified:	25 Apr 2024 22:18
URI:	http://eprints.lse.ac.uk/id/eprint/120730

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