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Markets for Anthropogenic Carbon Within the Larger Carbon Cycle

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  • Borenstein, Severin

Abstract

Human activity has disrupted the natural balance of greenhouse gases in the atmosphere and is causing climate change. Burning fossil fuels and deforestation result directly in about 9 gigatons of carbon (GtC) emissions per year against the backdrop of the natural carbon flux — emission and uptake — of about 210 GtC per year to and from oceans, vegetation, soils and the atmosphere. But scientific research now indicates that humans are also impacting the natural carbon cycle through less-direct, but very important, mechanisms that are more difficult to monitor and control. I explore the challenges this presents to market or regulatory mechanisms that might be used to reduce greenhouse gases: scientific uncertainty about these indirect processes, pricing heterogeneous impacts of similar human behaviors, and the difficulty of assigning property rights to a far larger set of activities than has previously been contemplated. While this does not undermine arguments for market mechanisms to control direct anthropogenic release of greenhouse gases, it suggests that more research is needed to determine how and whether these mechanisms can be extended to address indirect human impacts.

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Bibliographic Info

Paper provided by Regulation2point0 in its series Working paper with number 607.

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Date of creation: Jun 2010
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Handle: RePEc:reg:wpaper:607

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  1. Michael Grubb & Tim Laing & Thomas Counsell & Catherine Willan, 2011. "Global carbon mechanisms: lessons and implications," Climatic Change, Springer, vol. 104(3), pages 539-573, February.
  2. Tom Tietenberg, 1995. "Tradeable permits for pollution control when emission location matters: What have we learned?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(2), pages 95-113, March.
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Cited by:
  1. Hilary Sigman, 2010. "Monitoring and Enforcement of Climate Policy," Departmental Working Papers 201006, Rutgers University, Department of Economics.
  2. Gilbert E. Metcalf, 2011. "Comment on "Belts and Suspenders: Interactions among Climate Policy Regulations"," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 140-144 National Bureau of Economic Research, Inc.

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