The social value of offsets

Abstract

How much carbon should be stored in temporary and risky offsets to compensate 1 ton of CO2 emissions? Measured in terms of economic damages avoided, we cast the Social Value of an Offset (SVO) as a well-defined fraction of the Social Cost of Carbon (SCC) reflecting offset duration, and risks of non-additionality and failure. The SVO reflects the value of temporary storage, and overcomes shortcomings in the climate science and economics of previous contributions. [1][2][3][4] The SVO is policy relevant. An efficient net-zero policy will consist of offsets if their SVO-to-cost ratio exceeds the benefit-cost ratio of alternatives. The SVO yields an indicator of the equivalence of offsets to permanent carbon storage measured by the SVO-SCC ratio. We provide a matrix of equivalence factors for different risks, permanence and climate scenarios. Estimation yields a rule of thumb: one offset sequestering one ton for 50 years is equivalent to between 0.3 to 0.5 tons permanently locked away. Equivalence offers a means of replacing perpetual offset contracts by simpler, easy to monitor short-term contracts, has applications to carbon Life-Cycle Analysis 5 and the valuation of carbon debts 6 , and can be the basis of comparing offsets of different qualities in the voluntary and compliance markets.

Hurricanes pose a substantial risk to New England forest carbon stocks

“…However, public perception regarding controversies surrounding the manner in which carbon offsets are calculated and market pressures, such as the current low and fluctuating prices of carbon offsets, may discourage and disincentivize participation in carbon offset markets (Calel et al, 2021;Gifford, 2020;Groom & Venmans, 2023;Haya et al, 2020;Watt, 2021;Zhu et al, 2023). Furthermore, current policies and carbon markets that rely on the land sector do not adequately account for the risks posed by hurricanes.…”

Accelerating the Renewable Energy Revolution to Get Back to the Holocene

“…Even if large‐scale carbon recapture technologies materialize, local air pollution from these fossil fuel devices would continue to impose unacceptable damage to human health and wellbeing (Errigo et al., 2020; Fuller et al., 2022; Vohra et al., 2021). It is far less costly and risky to accelerate the rollout of renewables, prohibit new dirty power, and retire existing dirty infrastructure early (Groom & Venmans, 2023; Shindell et al., 2021; Way et al., 2022).…”

“…This in turn contributes to an unwarranted focus on techno‐economic scenarios that depend on less mature and more costly technologies such as next generation nuclear and negative emissions. Updated global‐scale energy system models and improved estimates of the social cost of carbon are needed to illuminate the most efficient and equitable path to climate restoration (Aldy et al., 2021; Groom & Venmans, 2023; Kaufman et al., 2020; Lovins et al., 2019).…”

“…Even for scenarios with long‐term equilibrium temperatures within the Paris Agreement range, temporary overshoot beyond 1.5°C increases the risk of triggering tipping elements by ∼70% compared with non‐overshoot scenarios (Wunderling et al., 2023). In this light, a gigaton of CO 2 prevented in 2023 provides much more value than a gigaton removed in 2100 after it has spent decades altering the climate (Groom & Venmans, 2023). Calculating a new metric of gigaton‐years demonstrates the extreme climate risk imposed by procrastinating emissions reductions (Figure 2c).…”

Hierarchical surface-modification of nano-Cu toward one pot H-transfer-coupling–cyclization–CO2 fixation tandem reactions

“…The emission of CO 2 from human activities, especially consuming fossil fuels, is regarded as a primary reason for the greenhouse effect, so reduction and transformation of CO 2 have drawn massive scientific investigation in the past decades, 1–4 while using CO 2 as a C1 building block for synthesizing high-value chemicals is a crucial route for both CO 2 conversion and green synthesis. 5–9 CO 2 has been reported to participate in the formation of C–C, C–N, and C–O bonds in the synthesis of organic compounds like cyclic carbonates, formamides, alkynoates, and oxazolidinones.…”