Realizing the social value of impermanent carbon credits

Andrew Balmford (), Srinivasan Keshav, Frank Venmans, David Coomes, Ben Groom, Anil Madhavapeddy and Tom Swinfield
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Andrew Balmford: University of Cambridge
Srinivasan Keshav: University of Cambridge
David Coomes: University of Cambridge
Ben Groom: London School of Economics
Anil Madhavapeddy: University of Cambridge
Tom Swinfield: University of Cambridge

Nature Climate Change, 2023, vol. 13, issue 11, 1172-1178

Abstract: 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.

Date: 2023
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DOI: 10.1038/s41558-023-01815-0

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