Realizing the social value of impermanent carbon credits

Balmford, Andrew, Keshav, Srinivasan, Venmans, Frank, Coomes, David, Groom, Ben, 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:	12 May 2024 06:42
URI:	http://eprints.lse.ac.uk/id/eprint/120730

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