Economic analysis of sequestered carbon trading between large final emitters and sequesterers of carbon
Bibliographic record
Abstract
This study empirically analyzes sequestered carbon trading between large final emitters and sequesterers of carbon. The Canadian government has advocated the use of carbon trading as a way of meeting Kyoto Protocol emissions reduction target. Tremendous welfare gains potentially exist in emission trading for large final emitters (LFEs) given their high abatement costs, particularly if carbon offsets can be exchanged since the marginal cost of sequestering carbon in Canada has been adjudged to be lower than the abatement costs (equivalent units) of LFEs. However, the transaction costs and the problem of a carbon release of sequestered carbon have been argued to erode away any potential gains in the trade for suppliers of sequestered carbon (Weersink et al 2005). This study shows that even with huge transaction costs of carbon trading, there are still welfare gains in carbon trading, particularly if sequestered carbon is exchanged. Given a price elasticity of supply of 9.18, a market equilibrium price of $10.44/t CO2e for sequestered carbon was determined when emitters buy carbon from sequesterers as against a price of $246.74/t of CO2e when the LFE trade with each other. In this thesis, we advocate the use of a carbon bank. The bank or aggregator has a reserve of carbon against any unforeseen contingencies and defaults. Concerns regarding permanent or temporary credits in a carbon market are addressed within the bank system as carbon could be sequestered in perpetuity or for the number of years required for a permanent reduction. Related to the ability to deal with the permanence issue, the risks of carbon release, price and policy can be efficiently allocated with a carbon bank system. First, emitters will not be thrown out of compliance by any course of action taken by the sink generators because of the risk-bearing ability of the bank. Second, sink generators bear little or no liability when sequestered carbon is released or withdrawn from the bank. The system is also expected to reduce transaction costs significantly since the bank acts as an aggregator that can pool carbon credits from a variety of sources and act as a clearing house for the salable credits.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.006 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.004 | 0.003 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.008 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".