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 prioritised in a way that maximises 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 public project appraisal, Life Cycle Analysis, pricing carbon debts and determining short term carbon credit and offset contracts. Potential criticisms of equivalence measures and tonne-year accounting stemming from concerns that temporary removals do not impact long-term temperatures are shown to be special cases of our integrated economic approach. Temporary removals provide transitory cooling benefits and if repeated are equivalent to permanent solutions. They also can have permanent effects via learning by doing or reducing the likelihood of tipping points. The SVTR helps determine how temporary removals can fit into an efficient response to climate. Ruling out temporary removals and equivalence, and the intertemporal transfers that they imply, could unnecessarily tie the hands of policy makers.