Researchers calculate economic value of temporary carbon reduction with ‘Social Value of Offsets’ formula
A new study identifies how to calculate the economic value of temporarily reducing carbon emissions through carbon offsetting.
The Social Value of Offsets (SVO) is an economic framework that will help policymakers calculate how much carbon should be stored in temporary offsets to make it equivalent to a permanent CO2 emission.
Using the SVO metric the researchers estimate that an offset sequestering one ton of carbon for 50 years is equivalent to between 0.3 to 0.5 tons permanently locked away, taking into account a range of factors for different risks, permanence and climate scenarios.
Offsets are a key part of Paris-compliant net zero strategies, but many offsetting projects fail and there is never a guarantee on how long an offset will sequester carbon for – making it difficult to measure the economic damage avoided.
The study, published in Nature, sets out the risks and uncertainties of offsetting, which occur due to the unregulated nature of the global offsets market.
6 July 2023
