IDEAS home Printed from https://ideas.repec.org/a/eee/resene/v34y2012i1p129-150.html
   My bibliography  Save this article

Economic prospects of ocean iron fertilization in an international carbon market

Author

Listed:
  • Rickels, Wilfried
  • Rehdanz, Katrin
  • Oschlies, Andreas

Abstract

Staying within the 2° C temperature increase target for climate change requires for ambitious emission reduction targets for the 2012–2020 compliance period. Cost-efficiency is a crucial criterion for the achievement of such targets, requiring analyses of all possible options. Enhancing the oceanic carbon sink via ocean iron fertilization (OIF) provides such an option. Our analysis reveals that the critical unit costs per net ton of CO2 sequestered by OIF range from 22 to 28 USD (price level 2000) in a post-Kyoto compliance scenario. The critical unit costs are defined as those that would make an emitter indifferent between various abatement options. With reference to hypothetical short-term large-scale Southern Ocean OIF we are able to show that seven years of OIF provide a number of credits exceeding those obtainable from global forestation projects lasting 20 years. From an economic perspective, our results indicate that OIF can be considered a potentially viable carbon-removal option. However, further research is needed, especially on adverse side-effects and their ecological and economical consequences.

Suggested Citation

  • Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2012. "Economic prospects of ocean iron fertilization in an international carbon market," Resource and Energy Economics, Elsevier, vol. 34(1), pages 129-150.
    • Handle: RePEc:eee:resene:v:34:y:2012:i:1:p:129-150
    DOI: 10.1016/j.reseneeco.2011.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0928765511000261
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.reseneeco.2011.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hertel, Thomas & Lee, Huey-Lin & Rose, Steven & Sohngen, Brent, 2008. "Modeling Land-use Related Greenhouse Gas Sources and Sinks and their Mitigation Potential," GTAP Working Papers 2605, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. David W. Keith & Edward Parson & M. Granger Morgan, 2010. "Research on global sun block needed now," Nature, Nature, vol. 463(7280), pages 426-427, January.
    3. Veronika Dornburg & Gregg Marland, 2008. "Temporary storage of carbon in the biosphere does have value for climate change mitigation: a response to the paper by Miko Kirschbaum," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(3), pages 211-217, March.
    4. Raymond T. Pollard & Ian Salter & Richard J. Sanders & Mike I. Lucas & C. Mark Moore & Rachel A. Mills & Peter J. Statham & John T. Allen & Alex R. Baker & Dorothee C. E. Bakker & Matthew A. Charette , 2009. "Southern Ocean deep-water carbon export enhanced by natural iron fertilization," Nature, Nature, vol. 457(7229), pages 577-580, January.
    5. Anger, Niels & Dixon, Alistair & Livengood, Erich, 2009. "Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments," ZEW Discussion Papers 09-001, ZEW - Leibniz Centre for European Economic Research.
    6. Gernot Klepper & Sonja Peterson, 2006. "Emissions Trading, CDM, JI, and More: The Climate Strategy of the EU," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 1-26.
    7. Aaron Strong & Sallie Chisholm & Charles Miller & John Cullen, 2009. "Ocean fertilization: time to move on," Nature, Nature, vol. 461(7262), pages 347-348, September.
    8. Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
    9. Bertram, Christine, 2010. "Ocean iron fertilization in the context of the Kyoto protocol and the post-Kyoto process," Energy Policy, Elsevier, vol. 38(2), pages 1130-1139, February.
    10. Klepper, Gernot & Peterson, Sonja & Springer, Katrin, 2003. "DART97: a description of the multi-regional, multi-sectoral trade model for the analysis of climate policies," Kiel Working Papers 1149, Kiel Institute for the World Economy (IfW Kiel).
    11. Peter M. Cox & Richard A. Betts & Chris D. Jones & Steven A. Spall & Ian J. Totterdell, 2000. "Erratum: Acceleration of global warming due to carbon-cycle feedbacks in a coupled climate model," Nature, Nature, vol. 408(6813), pages 750-750, December.
    12. van Kooten, G. Cornelis & Sohngen, Brent, 2007. "Economics of Forest Ecosystem Carbon Sinks: A Review," International Review of Environmental and Resource Economics, now publishers, vol. 1(3), pages 237-269, September.
    13. Klepper, Gernot & Peterson, Sonja, 2006. "Marginal abatement cost curves in general equilibrium: The influence of world energy prices," Resource and Energy Economics, Elsevier, vol. 28(1), pages 1-23, January.
    14. Garnaut,Ross, 2008. "The Garnaut Climate Change Review," Cambridge Books, Cambridge University Press, number 9780521744447.
    15. Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2009. "Accounting aspects of ocean iron fertilization," Kiel Working Papers 1572, Kiel Institute for the World Economy (IfW Kiel).
    16. Kousky, Carolyn & Rostapshova, Olga & Toman, Michael & Zeckhauser, Richard, 2009. "Responding to Threats of Climate Change Mega-Catastrophes," RFF Working Paper Series dp-09-45, Resources for the Future.
    17. Stéphane Blain & Bernard Quéguiner & Leanne Armand & Sauveur Belviso & Bruno Bombled & Laurent Bopp & Andrew Bowie & Christian Brunet & Corina Brussaard & François Carlotti & Urania Christaki & Antoin, 2007. "Effect of natural iron fertilization on carbon sequestration in the Southern Ocean," Nature, Nature, vol. 446(7139), pages 1070-1074, April.
    18. William G. Sunda & Susan A. Huntsman, 1997. "Interrelated influence of iron, light and cell size on marine phytoplankton growth," Nature, Nature, vol. 390(6658), pages 389-392, November.
    19. Olschewski, Roland & Benítez, Pablo C. & de Koning, G.H.J. & Schlichter, Tomás, 2005. "How attractive are forest carbon sinks? Economic insights into supply and demand of Certified Emission Reductions," Journal of Forest Economics, Elsevier, vol. 11(2), pages 77-94, September.
    20. Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2010. "Methods for greenhouse gas offset accounting: A case study of ocean iron fertilization," Ecological Economics, Elsevier, vol. 69(12), pages 2495-2509, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jilin Zhang & Yukun Xu, 2020. "Research on the Price Fluctuation and Risk Formation Mechanism of Carbon Emission Rights in China Based on a GARCH Model," Sustainability, MDPI, vol. 12(10), pages 1-11, May.
    2. Güssow, Kerstin & Proelss, Alexander & Oschlies, Andreas & Rehdanz, Katrin & Rickels, Wilfried, 2010. "Ocean iron fertilization: Why further research is needed," Marine Policy, Elsevier, vol. 34(5), pages 911-918, September.
    3. Boysen-Hogrefe, Jens & Dovern, Jonas & Groll, Dominik & van Roye, Björn & Scheide, Joachim, 2010. "Droht in Deutschland eine Kreditklemme?," Kiel Discussion Papers 472/473, Kiel Institute for the World Economy (IfW Kiel).
    4. Heitmann, Nadine & Peterson, Sonja, 2012. "The potential contribution of the shipping sector to an efficient reduction of global carbon dioxide emissions," Kiel Working Papers 1813, Kiel Institute for the World Economy (IfW Kiel).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2010. "Methods for greenhouse gas offset accounting: A case study of ocean iron fertilization," Ecological Economics, Elsevier, vol. 69(12), pages 2495-2509, October.
    2. Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2009. "Accounting aspects of ocean iron fertilization," Kiel Working Papers 1572, Kiel Institute for the World Economy (IfW Kiel).
    3. Güssow, Kerstin & Proelss, Alexander & Oschlies, Andreas & Rehdanz, Katrin & Rickels, Wilfried, 2010. "Ocean iron fertilization: Why further research is needed," Marine Policy, Elsevier, vol. 34(5), pages 911-918, September.
    4. Paschen, Marius & Meier, Felix & Rickels, Wilfried, 2022. "Accounting for terrestrial and marine carbon sink enhancement," Kiel Working Papers 2204, Kiel Institute for the World Economy (IfW Kiel), revised 2022.
    5. Anger, Niels & Dixon, Alistair & Livengood, Erich, 2009. "Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments," ZEW Discussion Papers 09-001, ZEW - Leibniz Centre for European Economic Research.
    6. John Foster & Liam Wagner & Phil Wild & Junhua Zhao & Lucas Skoofa & Craig Froome, 2011. "Market and Economic Modelling of the Intelligent Grid: End of Year Report 2009," Energy Economics and Management Group Working Papers 09, School of Economics, University of Queensland, Australia.
    7. Monge, Juan J. & Bryant, Henry L. & Gan, Jianbang & Richardson, James W., 2016. "Land use and general equilibrium implications of a forest-based carbon sequestration policy in the United States," Ecological Economics, Elsevier, vol. 127(C), pages 102-120.
    8. Gregmar Galinato & Shinsuke Uchida, 2010. "Evaluating Temporary Certified Emission Reductions in Reforestation and Afforestation Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(1), pages 111-133, May.
    9. David Walker, 2014. "The Economic Potential for Forest-Based Carbon Sequestration under Different Emissions Targets and Accounting Schemes," Working Papers 2014.02, School of Economics, La Trobe University.
    10. Melania Michetti & Ramiro Parrado, 2012. "Improving Land-use Modelling within CGE to Assess Forest-based Mitigation Potential and Costs," Working Papers 2012.19, Fondazione Eni Enrico Mattei.
    11. Ovando, Paola & Caparrós, Alejandro, 2009. "Land use and carbon mitigation in Europe: A survey of the potentials of different alternatives," Energy Policy, Elsevier, vol. 37(3), pages 992-1003, March.
    12. Indrajaya, Yonky & van der Werf, Edwin & Weikard, Hans-Peter & Mohren, Frits & van Ierland, Ekko C., 2016. "The potential of REDD+ for carbon sequestration in tropical forests: Supply curves for carbon storage for Kalimantan, Indonesia," Forest Policy and Economics, Elsevier, vol. 71(C), pages 1-10.
    13. Sathaye, Jayant A. & Anger, Niels, 2008. "Reducing Deforestation and Trading Emissions: Economic Implications for the post-Kyoto Carbon Market," ZEW Discussion Papers 08-016, ZEW - Leibniz Centre for European Economic Research.
    14. Van den Bergh, Kenneth & Delarue, Erik, 2015. "Quantifying CO2 abatement costs in the power sector," Energy Policy, Elsevier, vol. 80(C), pages 88-97.
    15. Ortega-Pacheco, Daniel V. & Keeler, Andrew G. & Jiang, Shiguo, 2019. "Climate change mitigation policy in Ecuador: Effects of land-use competition and transaction costs," Land Use Policy, Elsevier, vol. 81(C), pages 302-310.
    16. Heitmann, Nadine & Peterson, Sonja, 2012. "The potential contribution of the shipping sector to an efficient reduction of global carbon dioxide emissions," Kiel Working Papers 1813, Kiel Institute for the World Economy (IfW Kiel).
    17. Ruth Delzeit & Malte Winkler & Mareike Söder, 2018. "Land Use Change under Biofuel Policies and a Tax on Meat and Dairy Products: Considering Complexity in Agricultural Production Chains Matters," Sustainability, MDPI, vol. 10(2), pages 1-25, February.
    18. Parisa, Zack & Marland, Eric & Sohngen, Brent & Marland, Gregg & Jenkins, Jennifer, 2022. "The time value of carbon storage," Forest Policy and Economics, Elsevier, vol. 144(C).
    19. Vermont, Bruno & De Cara, Stéphane, 2010. "How costly is mitigation of non-CO2 greenhouse gas emissions from agriculture?: A meta-analysis," Ecological Economics, Elsevier, vol. 69(7), pages 1373-1386, May.
    20. Calzadilla, Alvaro & Delzeit, Ruth & Klepper, Gernot, 2014. "DART-BIO: Modelling the interplay of food, feed and fuels in a global CGE model," Kiel Working Papers 1896, Kiel Institute for the World Economy (IfW Kiel).

    More about this item

    Keywords

    Climate change; Climate engineering; Ocean iron fertilization; CO2 market; Emission trading;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:resene:v:34:y:2012:i:1:p:129-150. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505569 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.