The Social Value of Temporary Carbon Removals and Delayed Emissions

An economic approach to calculating the Social Value of Temporary Reductions (SVTR) in atmospheric carbon is discussed. The SVTR allows different carbon removals projects to be prioritized in a way that maximizes welfare and establishes equivalence between temporary, risky removals with permanent ones in terms of avoided welfare losses from climate damages. The approach is compared to previous attempts in the physical and natural sciences and economics to price temporary emissions reductions, none of which successfully integrate economics and climate science. Applications of the SVTR exist in Life Cycle Analysis, pricing carbon debts and determining short-term carbon credit and offset contracts. The paper concludes by addressing the potential criticisms of the equivalence measure and tonne-year accounting in general, that
stem from concerns that temporary removals do not impact long-term temperatures. We show that these concerns are special cases of our integrated economic approach and argue that ruling out temporary removals and equivalence, and the intertemporal transfers that they imply, could unnecessarily tie the hands of policymakers.