Inter-trading permanent emissions credits and rented temporary carbon emissions offsets: some issues and alternatives

Roger Sedjo () and Gregg Marland

Climate Policy, 2003, vol. 3, issue 4, 435-444

Abstract: Permit trading among polluting parties is now firmly established as a policy tool in a range of environmental policy areas. The Kyoto Protocol accepts the principle that sequestration of carbon in the terrestrial biosphere can be used to offset emissions of carbon from fossil fuel combustion and outlines mechanisms. Although the lack of guaranteed permanence of biological offsets is often viewed as a defect, this paper argues that the absence of guaranteed permanence need not be a fundamental problem. We view carbon emissions as a liability issue. One purpose of an emissions credit system is to provide the emitter with a means to satisfy the carbon liability associated with her firm's (or country's) release of carbon into the atmosphere. We have developed and here expand on a rental approach, in which sequestered carbon is explicitly treated as temporary: the emitter temporarily satisfies his liability by temporarily "parking" his liability, for a fee, in a terrestrial carbon reservoir, or "sink," such as a forest or agricultural soil. Finally, the paper relates the value of permanent and temporary sequestration and argues that both instruments are tradable and have a high degree of substitutability that allows them to interact in markets.

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://hdl.handle.net/10.1016/S1469-3062(03)00051-2 (text/html)
Access to full text is restricted to subscribers.

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:taf:tcpoxx:v:3:y:2003:i:4:p:435-444

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tcpo20

DOI: 10.1016/S1469-3062(03)00051-2

Access Statistics for this article

Climate Policy is currently edited by Professor Michael Grubb

More articles in Climate Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().