Depletion of the global carbon budget: a user cost approach

Barbier, Edward B.

doi:10.1017/s1355770x17000055

Cited by 7 publications

(3 citation statements)

References 15 publications

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“…Note that the marginal value of the remaining safe operating space λ(t) may also be thought of the user cost, or scarcity value, associated with depleting S(t). For example, [14] develop a user cost model of one particular type of safe operating space-the 2 • C global carbon budget-to show how this scarcity value may be affected, and the remaining carbon budget preserved, under different policy scenarios. See also [15].…”

Section: Optimal Exploitation Of the Safe Operating Spacementioning

confidence: 99%

“…For example, the safe operating space for climate change might be the global carbon budget, which is the cumulative amount of anthropogenic CO 2 emissions that would limit global warming to less than 2 • C [7,14,15]. Innovations that reduce greenhouse gas (GHG) emissions, such as carbon capture and sequestration, hybrid vehicles, GHG abatement technologies, and switching to renewables, would lessen depletion of the remaining 2 • C global carbon budget.…”

Section: Technological Innovationmentioning

confidence: 99%

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Natural Resource Economics, Planetary Boundaries and Strong Sustainability

Barbier

Burgess

2017

Sustainability

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Earth systems science maintains that there are nine "planetary boundaries" that demarcate a sustainable, safe operating space for humankind for essential global sinks and resources. Respecting these planetary boundaries represents the "strong sustainability" perspective in economics, which argues that some natural capital may not be substituted and are inviolate. In addition, the safe operating space defined by these boundaries can be considered a depletable stock. We show that standard tools of natural resource economics for an exhaustible resource can thus be applied, which has implications for optimal use, price paths, technological innovation, and stock externalities. These consequences in turn affect the choice of policies that may be adopted to manage and allocate the safe operating space available for humankind.

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Section: Optimal Exploitation Of the Safe Operating Spacementioning

confidence: 99%

Section: Technological Innovationmentioning

confidence: 99%

Natural Resource Economics, Planetary Boundaries and Strong Sustainability

Barbier

Burgess

2017

Sustainability

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“…The economic framework of this optimal extraction model for an exhaustible resource has been applied to several different types of resources, including mineral resources, energy stocks (especially gas and oil reserves) [35] and the management of groundwater resources [36]. In recent years, Barbier and Burgess have applied this framework to address the optimal management of "safe operating spaces" in the case of natural forests [37] and the global carbon budget [38]. However, as far as we are aware, this is the first paper to examine the optimal management of the environmental and natural resource assets demarked by safe operating space under monopolistic rather the perfectly competitive conditions.…”

Section: Review Of the Literaturementioning

confidence: 99%

Sustainable Use of the Environment, Planetary Boundaries and Market Power

Barbier

Burgess

2021

Sustainability

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Many of the environment and natural resources that constitute key “safe operating spaces”, as designated by planetary boundaries, are being exploited by a handful of large firms with considerable market share. In this paper, we discuss how the environment and natural resources that occur within a safe operating space can be treated as an exploitable finite stock. We use an optimal depletion model to show how the extraction of these exhaustible assets can be managed optimally, and allow for adjustment in price paths due to technological innovation and environmental externalities. Given the growing market concentration and monopoly power in the key economic sectors that exploit the environment and resources that constitute many safe operating spaces, we then explore how monopoly conditions can alter the extraction and price path of the environmental assets over time compared to that under competitive market conditions. We show that the monopoly may be compatible with more sustainable use, by extending the life of the exploitable, depletable stock, at the expense of firms capturing excessive resource rents from exploitation. This tradeoff means that any policies implemented to tax the excessive monopoly rents need to be designed without compromising the sustainable use of the environment. The tax revenue raised can be channeled into protecting or regenerating natural assets that are essential for global environmental sustainability. If investment in regeneration efforts is sufficiently substantial, or if the wider social and environmental values associated with the exhaustible assets are taken into account, then the safe operating space may be conserved indefinitely. Such policy challenges will become increasingly important as dominant firms exert market power over the planet’s remaining environment and resources that constitute key “safe operating spaces”, as designated by planetary boundaries.

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The safe carbon budget

Ploeg

2018

Climatic Change

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Cumulative emissions drive peak global warming and determine the carbon budget needed to keep temperature below 2 or 1.5°C. This safe carbon budget is low if uncertainty about the transient climate response is high and risk tolerance (willingness to accept risk of overshooting the temperature target) is low. Together with energy costs, this budget determines the optimal carbon price and how quickly fossil fuel is abated and replaced by renewable energy. This price is the sum of the present discounted value of all future losses in aggregate production due to emitting one ton of carbon today plus the cost of peak warming that rises over time to reflect the increasing scarcity of carbon as temperature approaches its upper limit. If policy makers ignore production losses, the carbon price rises more rapidly. If they ignore the peak temperature constraint, the carbon price rises less rapidly. The alternative of adjusting damages upwards to factor in the peak warming constraint leads initially to a higher carbon price which rises less rapidly.

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Depletion of the global carbon budget: a user cost approach

Cited by 7 publications

References 15 publications

Natural Resource Economics, Planetary Boundaries and Strong Sustainability

Natural Resource Economics, Planetary Boundaries and Strong Sustainability

Sustainable Use of the Environment, Planetary Boundaries and Market Power

The safe carbon budget

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