Climate urgency and the timing of carbon fluxes

• Published in: Biomass & bioenergy Vol. 151; p. 106162
• Main Authors: Cornelis van Kooten, G., Withey, Patrick, Johnston, Craig M.T.
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.08.2021
• Subjects: Bioenergy; Climate change; Discounting; Forestry; Tree planting; Discounting; Climate change; Bioenergy; Tree planting; Forestry
• ISSN: 0961-9534; 1873-2909
• DOI: 10.1016/j.biombioe.2021.106162

The current climate emergency dictates that immediate action is required to mitigate climate change, which implies that carbon fluxes occurring 20 or more years from now are too late to have any mitigative effect. Economic models discount monetized carbon fluxes, but do not include any discussion of physical carbon fluxes. To respond to a climate emergency, however, future physical carbon fluxes need to be discounted at a high rate to incentivize action today. Using the DICE model, we demonstrate that physical discounting of carbon erodes the effectiveness of afforestation and bioenergy projects that reduce emissions over time. Our analysis indicates that policymakers need to convert concerns about climate urgency into an actual policy variable, namely, a weighting scheme that discounts future physical carbon into a current - value equivalent, thereby removing incentives to delay climate action. •It is important to distinguish between a monetary discount rate and a rate used to discount physical carbon.•A discounting scheme for carbon that puts less value on future removals will incentivize carbon sequestration today.•If a climate emergency exists, future removals of CO2 become less relevant, and should be weighted less.•Economists need to convert future carbon into a current value equivalent, to remove incentives to delay climate action.