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Optimal global carbon management with ocean sequestration

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  • Wilfried Rickels
  • Thomas S. Lontzek

Abstract

We investigate the socially optimal intervention in the global carbon cycle. Limiting factors are (i) increasing atmospheric carbon concentration due to fossil fuel-related carbon emissions, and (ii) the inertia of the global carbon cycle itself. Accordingly, we explicitly include the largest non-atmospheric carbon reservoir, the ocean, to achieve a better representation of the global carbon cycle than the proportional-decay assumption usually resorted to in economic models. We also investigate the option to directly inject CO 2 into the deep ocean (a form of carbon sequestration), deriving from this a critical level for ocean sequestration costs. Above this level, ocean sequestration is merely a temporary option; below it, ocean sequestration is the long-term option permitting extended use of fossil fuels. The latter alternative involves higher atmospheric stabilization levels. In this connection it should be noted that the efficiency of ocean sequestration depends on the time-preference and the inertia of the carbon cycle. Copyright 2012 Oxford University Press 2011 All rights reserved, Oxford University Press.

Suggested Citation

  • Wilfried Rickels & Thomas S. Lontzek, 2012. "Optimal global carbon management with ocean sequestration," Oxford Economic Papers, Oxford University Press, vol. 64(2), pages 323-349, April.
  • Handle: RePEc:oup:oxecpp:v:64:y:2012:i:2:p:323-349
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    File URL: http://hdl.handle.net/10.1093/oep/gpr027
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    References listed on IDEAS

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    1. Farzin, Y H & Tahvonen, O, 1996. "Global Carbon Cycle and the Optimal Time Path of a Carbon Tax," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 515-536, October.
    2. Tahvonen, Olli & Withagen, Cees, 1996. "Optimality of irreversible pollution accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 20(9-10), pages 1775-1795.
    3. Toman, Michael A. & Withagen, Cees, 2000. "Accumulative pollution, "clean technology," and policy design," Resource and Energy Economics, Elsevier, vol. 22(4), pages 367-384, October.
    4. Olli Tahvonen, 1997. "Fossil Fuels, Stock Externalities, and Backstop Technology," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 855-874, November.
    5. Forster, Bruce A., 1975. "Optimal pollution control with a nonconstant exponential rate of decay," Journal of Environmental Economics and Management, Elsevier, vol. 2(1), pages 1-6, September.
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    Cited by:

    1. Niko Jaakkola, 2013. "Monopolistic Sequestration of European Carbon Emissions," OxCarre Working Papers 098, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    2. Alain Jean-Marie & Michel Moreaux & Mabel Tidball, 2011. "Carbon sequestration in leaky reservoirs," Post-Print hal-00863230, HAL.
    3. Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2009. "Accounting aspects of ocean iron fertilization," Kiel Working Papers 1572, Kiel Institute for the World Economy (IfW).
    4. Lontzek, Thomas S. & Rickels, Wilfried, 2008. "Carbon capture and storage & the optimal path of the carbon tax," Kiel Working Papers 1475, Kiel Institute for the World Economy (IfW).

    More about this item

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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