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

Tas Thamo, David J. Pannell, Marit E. Kragt, M.J. J. Robertson, Maksym Polyakov

    Research output: Contribution to journalArticle

    5 Citations (Scopus)

    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.
    Original languageEnglish
    Pages (from-to)1095–1111
    Number of pages17
    JournalMitigation and Adaptation Strategies for Global Change
    Volume22
    Early online date27 Apr 2016
    DOIs
    Publication statusPublished - Oct 2017

    Fingerprint

    carbon sequestration
    economics
    cost
    mitigation
    carbon
    research method
    soil carbon
    viability
    timescale
    vegetation
    soil
    price
    policy

    Cite this

    @article{f6d5de0490a3452f9e51e715cb0e7e4d,
    title = "Dynamics and the economics of carbon sequestration: common oversights and their implications",
    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.",
    author = "Tas Thamo and Pannell, {David J.} and Kragt, {Marit E.} and Robertson, {M.J. J.} and Maksym Polyakov",
    year = "2017",
    month = "10",
    doi = "10.1007/s11027-016-9716-x",
    language = "English",
    volume = "22",
    pages = "1095–1111",
    journal = "Mitigation and Adaptation Strategies for Global Change",
    issn = "1381-2386",
    publisher = "Springer",

    }

    TY - JOUR

    T1 - Dynamics and the economics of carbon sequestration

    T2 - common oversights and their implications

    AU - Thamo, Tas

    AU - Pannell, David J.

    AU - Kragt, Marit E.

    AU - Robertson, M.J. J.

    AU - Polyakov, Maksym

    PY - 2017/10

    Y1 - 2017/10

    N2 - 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.

    AB - 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.

    U2 - 10.1007/s11027-016-9716-x

    DO - 10.1007/s11027-016-9716-x

    M3 - Article

    VL - 22

    SP - 1095

    EP - 1111

    JO - Mitigation and Adaptation Strategies for Global Change

    JF - Mitigation and Adaptation Strategies for Global Change

    SN - 1381-2386

    ER -