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Temporary crediting of carbon storage is a proposed instrument that allows entities with emissions reductions obligations to defer some obligations for a fixed period of time. This instrument provides a means of guaranteeing the environmental integrity of a carbon sequestration project. But because the user of the temporary credit takes on the liability of renewing it, or replacing it with a permanent credit, the temporary credit must sell at a discount compared with a permanent credit. The authors show that this discount depends on the expected change in price of a permanent credit. Temporary credits have value only if restrictions on carbon emissions are not expected to tighten substantially. The intuition is illustrated by assessing the value of a hypothetical temporary sulfur dioxide sequestration credit using historical data on actual sulfur dioxide allowance prices.
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This paper studies the role of cooperation and reciprocity on the structure of self-enforcing carbon sequestration contracts. The optimal contract is derived as a result of the optimizing actions of purely self-interested agents, and agents that act according to social or egoistic preferences. The analysis finds that buyers' preferences do not affect contract structure unless the buyer is averse to inequality. In contrast, the optimal payment rule is directly related to the seller's preferences as the payment must motivate the seller to comply with forest conservation. It also finds that the presence of altruistic or warm glow preferences increases the likelihood of cooperation in the long-term relationship relative to the case of selfish parties. These results imply that agencies or organizations that are not only concerned about carbon sequestration but also have objectives related to the economic development of small land holders may be more successful in the implementation contracts to reduce emissions from deforestation and forest degradation.
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This paper studies the role of cooperation and reciprocity on the structure of self-enforcing carbon sequestration contracts. The optimal contract is derived as a result of the optimizing actions of purely self-interested agents, and agents that act according to social or egoistic preferences. The analysis finds that buyers' preferences do not affect contract structure unless the buyer is averse to inequality. In contrast, the optimal payment rule is directly related to the seller's preferences as the payment must motivate the seller to comply with forest conservation. It also finds that the presence of altruistic or warm glow preferences increases the likelihood of cooperation in the long-term relationship relative to the case of selfish parties. These results imply that agencies or organizations that are not only concerned about carbon sequestration but also have objectives related to the economic development of small land holders may be more successful in the implementation contracts to reduce emissions from deforestation and forest degradation.
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Temporary crediting of carbon storage is a proposed instrument that allows entities with emissions reductions obligations to defer some obligations for a fixed period of time. This instrument provides a means of guaranteeing the environmental integrity of a carbon sequestration project. But because the user of the temporary credit takes on the liability of renewing it, or replacing it with a permanent credit, the temporary credit must sell at a discount compared with a permanent credit. The authors show that this discount depends on the expected change in price of a permanent credit. Temporary credits have value only if restrictions on carbon emissions are not expected to tighten substantially. The intuition is illustrated by assessing the value of a hypothetical temporary sulfur dioxide sequestration credit using historical data on actual sulfur dioxide allowance prices.
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"The secure storage of energy and carbon dioxide in subsurface geological formations plays a crucial role in transitioning to a low-carbon energy system. The suitability and security of subsurface storage sites rely on the geological and hydraulic properties of the reservoir and confining units. Additionally, their ability to withstand varying thermal, mechanical, hydraulic, biological and chemical conditions during storage operations is essential. Each subsurface storage technology has distinct geological requirements and faces specific economic, logistical, public and scientific challenges. As a result, certain sites can be better suited than others for specific low-carbon energy applications. This Special Publication provides a summary of the state of the art in subsurface energy and carbon dioxide storage. It includes 20 case studies that offer insights into site selection, characterization of reservoir processes, the role of caprocks and fault seals, as well as monitoring and risk assessment needs for subsurface storage operations"--Publisher's description.
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Deployment of Carbon Capture and Storage: Insights, Case Studies, and Key Learnings presents the latest research and technologies on Carbon Capture and Storage (CCS), building on the topics to provide case studies and lesson learned from early stage projects. The book highlights CCS storage technologies deployed at scale to offer readers insights and guidance that will ensure they make sound decisions when developing CCS programs. Cost and risk minimization techniques are included to minimize cost and risk for wide-scale commercial deployment required by 2050. Global case studies on CCS technology and high TLR provide readers with unique insight into worldwide activity.
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