EconPapers    
Economics at your fingertips  
 

Dynamics and the economics of carbon sequestration: common oversights and their implications

Tas Thamo (), David Pannell, Marit Kragt, Michael J. Robertson and Maksym Polyakov
Additional contact information
Tas Thamo: University of Western Australia
Michael J. Robertson: CSIRO Agriculture Flagship

Mitigation and Adaptation Strategies for Global Change, 2017, vol. 22, issue 7, No 6, 1095-1111

Abstract: Abstract Accurate assessment of the cost of carbon sequestration is important for the development of mitigation policies globally. Given that sequestration in soils or vegetation is a lengthy process, such assessment requires financial discounting and making realistic assumptions about changes over time in the rate of sequestration, the price of carbon, and the opportunity cost incurred by adopting sequestration practices. Our objective is to demonstrate how these assumptions affect estimates of the cost of sequestration-based mitigation strategies. Using an Australian case study of soil carbon sequestration, our estimates of the carbon price required for financial viability are highly sensitive to dynamic assumptions, varying by a factor of four with different assumptions. Yet the influence of these time-related assumptions is poorly acknowledged in the literature, with many studies either failing to disclose their assumptions, or employing questionable assumptions and methods. Recommended global strategies are for researchers to report their assumptions related to dynamics much more transparently and to improve their research methods and the realism of their assumptions when analysing the economics of carbon sequestration. We recommend that policymakers become better aware of the issues created by dynamics, so that they are able to validly interpret assessments of the cost of sequestration and to ensure that they design policies in a way that facilitates fair comparison of the costs of mitigation strategies that operate over different timescales.

Keywords: Carbon sequestration; Economics; Dynamics; Discounting; Carbon price; Assumption; Time (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s11027-016-9716-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:masfgc:v:22:y:2017:i:7:d:10.1007_s11027-016-9716-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11027

DOI: 10.1007/s11027-016-9716-x

Access Statistics for this article

Mitigation and Adaptation Strategies for Global Change is currently edited by Robert Dixon

More articles in Mitigation and Adaptation Strategies for Global Change from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-20
Handle: RePEc:spr:masfgc:v:22:y:2017:i:7:d:10.1007_s11027-016-9716-x