Do carbon offsets offset carbon?

Raphael Calel, Jonathan Colmer (), Antoine Dechezleprêtre and Matthieu Glachant

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We develop and implement a new method for identifying wasted subsidies, and use it to provide systematic evidence on the misallocation of carbon offsets in the Clean Development Mechanism - the world's largest carbon offset program. Using newly constructed data on the locations and characteristics of 1,350 wind farms in India - a context where it was believed, ex-ante, that the Clean Development Mechanism could significantly increase development above baseline projections - we estimate that at least 52% of approved carbon offsets were allocated to projects that would very likely have been built anyway. In addition to wasting scarce resources, we estimate that the sale of these offsets to regulated polluters has substantially increased global carbon dioxide emissions.

Keywords: carbon offset; infra-marginal support; misallocation; investment; subsidies; wind power (search for similar items in EconPapers)
JEL-codes: H23 H43 L94 Q42 Q54 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2021-10-29
New Economics Papers: this item is included in nep-ene, nep-env and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://eprints.lse.ac.uk/113849/ Open access version. (application/pdf)

Related works:
Journal Article: Do Carbon Offsets Offset Carbon? (2025)
Working Paper: Do Carbon Offsets Offset Carbon? (2025)
Working Paper: Do carbon offsets offset carbon? (2021)
Working Paper: Do Carbon Offsets Offset Carbon? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:113849

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