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Trading Carbon under Uncertainty: How Much Credit should be given for Afforestation?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Ranjan, Ram Shortle, James S. |
| Copyright Year | 2007 |
| Abstract | This paper designs an optimal trading ratio between carbon abatement measures that are certain (such as curtailing carbon emissions) and those that have elements of uncertainty associated with them (such as sequestration through afforestation). Carbon sequestration through afforestation is prone to leaking back into the atmosphere through loss of forestry caused by natural disasters and harvesting. When the stock of carbon sequestered in plantations is uncertain, its value should be discounted compared to those measures that have a permanent impact on the atmospheric stock of carbon. An optimal trading mechanism would involve equating the ratio of the marginal costs of the two measures to their shadow prices which are determined by the opportunity costs these measures impose on societal welfare. Conditions are also derived for implementing this trading ratio through market mechanisms. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://works.bepress.com/ram_ranjan/9/download/ |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
