Kenneth R. Richards

Climate change damage and the trace gas index issue

Efficient policies to control trace gas emissions require estimation of an appropriate “exchange rate” among these gases; i.e. the relative value of reducing emissions of each gas. A dynamic stock pollutant model is developed that considers damages associated with both non-climatic and climatic effects of the gases, differing atmospheric lifetimes of the gases, the discount rate, and non-linear damages. The index value and shadow value of control are estimated for carbon dioxide, carbon monoxide, methane, nitrous oxide and the 4 major chlorofluorocarbons (CFCs). The value of control for short-lived relative to long-lives gases is lower for low discount rates and quadratic compared with linear damages. The relative value of control for all gases falls relative to carbon dioxide if one considers the direct beneficial effects of carbon dioxide on agriculture. The general approach developed in the paper may have application for other environmental problems where multiple substances pose individual risks but also jointly contribute to a single risk.

Costs of creating carbon sinks in the U.S.

Abstract New models of the dynamic patterns of carbon uptake by forest ecosystems allow improvements in the estimation of the costs of carbon sequestration in the U.S. The preliminary results of an effort to update an earlier study indicate that conversion of environmentally sensitive and economically marginal cropland and pastureland in the U.S. could offset as much as 25% of current U.S. emissions at costs of

The time value of carbon in bottom‐up studies

US 8–60 per short ton.

International forest carbon sequestration in a post-Kyoto agreement

Abstract In many climate change mitigation cost‐effectiveness studies that do not develop endogenous shadow prices for the value of carbon it is necessary to determine the time value of reductions in carbon dioxide emissions. This paper examines the implications for the time value of carbon of exogenously specifying (1) the path of marginal damages over time, (2) the path of emissions over time, and (3) that the emissions path follow an optimal trajectory over time.

Determinants of the Costs of Carbon Capture and Sequestration for Expanding Electricity Generation Capacity

Given the size of the global carbon pool in forest vegetation, the potential climatic effects of natural and anthropogenic changes in forests are enormous. Therefore, forest carbon management must be an important element of any international agreement on climate change. In this regard, the Kyoto Protocol has proven ineffective, in part, due to its emphasis on project-based evaluation and the absence of a mechanism for compensating avoided deforestation. We consider alternative ways to include forest carbon management within the framework of an international climate treaty. We conclude that project-by-project accounting, as under the Clean Development Mechanism of the Kyoto Protocol, is fundamentally flawed due to problems with additionality, leakage, and permanence. We find that national-level accounting linked to an emissions trading program offers much more promise. Under the national inventory (NI) approach, nations conduct periodic inventories of their entire forest carbon stock. The measured stock is compared to a negotiated baseline stock to determine the number of credits to redeem (or debits to cover) in the permit market. The NI approach is more comprehensive than, and addresses some of the incentive problems with, recent proposals for compensating reductions in tropical deforestation (e.g., REDD). For the NI approach to succeed, it must be feasible to conduct regular and reliable national forest inventories for a large group of countries. If current measurement technologies are inadequate, we recommend that an input-based approach be used in the interim until the measurement challenges are overcome. International Forest Carbon Sequestration in a Post-Kyoto Agreement Andrew J. Plantinga and Kenneth R. Richards

Consideration of country and forestry/ land‐use characteristics in choosing forestry instruments to achieve climate mitigation goals

The carbon capture and sequestration (CCS) literature to date lacks a comprehensive economic analysis. Our study addresses this need. It models the costs of the entire process, from generation at the power plant to carbon injection at the reservoir, examining the economic factors that affect technology choice and CCS costs. We consider three major fossil fuel generating technologies, each with and without CCS. Our results suggest that natural gas and coal prices have profound impacts on the carbon price needed to induce CCS. Previous cost modeling approaches do not capture this complexity. Therefore, we developed a cost region graph that models technology choice as a function of carbon and fuel prices. Generally, the least�?cost technology at low carbon prices is pulverized coal, while intermediate carbon prices favor natural gas technologies and high carbon prices favor coal gasification with capture. However, the specific carbon prices at which these transitions occur is largely determined by the price of natural gas. For instance, the CCS-justifying carbon price ranges from

Environmental Offset Programs: Survey and Synthesis

100/t C at high natural gas prices to

Experience with Carbon Taxes and Greenhouse Gas Emissions Trading Systems

200/t C at low natural gas prices. This result has important implications for potential climate change legislation. Additionally, our analysis informs the relative importance of other variables. Capital costs are highly important, as reflected by the impact of the Energy Policy Act of 2005, which substantially lowers the justifying carbon price and favors coal technologies. Pipeline distance and reservoir type have smaller impacts overall, but highlight the heterogeneity of costs across industry.

Stabilizing U.S. net carbon emissions by planting trees

Abstract To implement effective carbon sequestration policies policymakers must analyze key characteristics of the country (geographic, institutional, economic, and infrastructural factors) and forestry and land‐use practices (the degree of risk associated with investment, the relative difficulty in measuring sequestration, and the degree of discretion allowed). Without careful analysis of this type, policies may have unintended negative effects.

A REVIEW OF FOREST CARBON SEQUESTRATION COST STUDIES: A DOZEN YEARS OF RESEARCH

In the real world, taxes and cap-and-trade systems are rarely implemented in their pure form. In this paper, we examine a related approach that has been used widely in practice – which we refer to as an “offset.” The idea behind offsets is to encourage firms or entities that may not be a part of the main regulatory system to produce environmental improvements, which can then be used to offset pollution reduction requirements in the main regulatory system. This paper provides a survey and synthesis of the literature on the use of offsets. Examples include offsets for limiting greenhouse gas emissions, maintaining ecosystem services for wetlands, achieving local air pollution goals, protecting water quality, and promoting energy efficiency. The paper reviews how offsets are used in practice and examines what is known about their environmental and economic impacts. Combining insights from the political economy of using offsets with their intrinsic design challenges raises a potentially serious problem – namely, that offsets may often fail to take adequate account of environmental or ecosystem damages. Because this problem can be significant, alternatives should be considered.