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Economic prospects of ocean iron fertilization in an international carbon market

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  • Rickels, Wilfried
  • Rehdanz, Katrin
  • Oschlies, Andreas

Abstract

Staying within the 2° C temperature increase target for climate change requires for ambitious emission reduction targets for the 2012–2020 compliance period. Cost-efficiency is a crucial criterion for the achievement of such targets, requiring analyses of all possible options. Enhancing the oceanic carbon sink via ocean iron fertilization (OIF) provides such an option. Our analysis reveals that the critical unit costs per net ton of CO2 sequestered by OIF range from 22 to 28 USD (price level 2000) in a post-Kyoto compliance scenario. The critical unit costs are defined as those that would make an emitter indifferent between various abatement options. With reference to hypothetical short-term large-scale Southern Ocean OIF we are able to show that seven years of OIF provide a number of credits exceeding those obtainable from global forestation projects lasting 20 years. From an economic perspective, our results indicate that OIF can be considered a potentially viable carbon-removal option. However, further research is needed, especially on adverse side-effects and their ecological and economical consequences.

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  • Rickels, Wilfried & Rehdanz, Katrin & Oschlies, Andreas, 2012. "Economic prospects of ocean iron fertilization in an international carbon market," Resource and Energy Economics, Elsevier, vol. 34(1), pages 129-150.
    • Handle: RePEc:eee:resene:v:34:y:2012:i:1:p:129-150
    DOI: 10.1016/j.reseneeco.2011.04.003
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    3. Boysen-Hogrefe, Jens & Dovern, Jonas & Groll, Dominik & van Roye, Björn & Scheide, Joachim, 2010. "Droht in Deutschland eine Kreditklemme?," Kiel Discussion Papers 472/473, Kiel Institute for the World Economy (IfW Kiel).
    4. Jennifer Morris & Angelo Gurgel & Bryan K. Mignone & Haroon Kheshgi & Sergey Paltsev, 2024. "Mutual reinforcement of land-based carbon dioxide removal and international emissions trading in deep decarbonization scenarios," Nature Communications, Nature, vol. 15(1), pages 1-11, December.
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    More about this item

    Keywords

    Climate change; Climate engineering; Ocean iron fertilization; CO2 market; Emission trading;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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