eprintid: 13863
rev_number: 16
eprint_status: archive
userid: 353
dir: disk0/00/01/38/63
datestamp: 2016-10-05 08:43:42
lastmod: 2021-08-27 17:27:50
status_changed: 2016-10-05 08:43:42
type: article
metadata_visibility: show
item_issues_count: 1
creators_name: Krasovskii, A.
creators_name: Khabarov, N.
creators_name: Obersteiner, M.
creators_id: 8266
creators_id: 1850
creators_id: 7255
creators_orcid: 0000-0003-0940-9366
creators_orcid: 0000-0001-5372-4668
creators_orcid: 0000-0001-6981-2769
title: CO2 -intensive power generation and REDD-based emission offsets with a benefit-sharing mechanism
ispublished: pub
divisions: prog_esm
keywords: Electricity generation, CO2 emissions, REDD offsets, Benefit-sharing
abstract: We propose and explore financial instruments supporting programs for reducing emissions from deforestation and forest degradation (FI-REDD). Within a microeconomic framework we model interactions between an electricity producer (EP), electricity consumer (EC), and forest owner (FO). To keep their profit at a maximum, the EP responds to increasing CO2 prices by adjusting electricity quantities generated by different technologies and charging a higher electricity price to the EC. The EP can prepare for future high (uncertain) CO2 prices by employing FI-REDD: they can purchase an amount of offsets under an unknown future CO2 price and later, when the CO2 price is discovered, decide how many of these offsets to use for actually offsetting emissions and sell the rest on the market, sharing the revenue with the FO. FI-REDD allows for optional consumption of emission offsets by the EP (any amount up to the initially contracted volume is allowed), and includes a benefit-sharing mechanism between the EP and FO as it regards unused offsets. The modeling results indicate that FI-REDD might help avoid bankruptcy of CO2-intensive producers at high levels of CO2 prices and therefore serve as a stabilizing mechanism during the transition of energy systems to greener technologies. The analytical results demonstrate the limits for potential market size explained by existing uncertainties. We illustrated that when suppliers and consumers of REDD offsets have asymmetric information on future CO2 prices, benefit-sharing increases the contracted REDD offsets quantity.
date: 2017-11-01
date_type: published
publisher: Springer
id_number: doi:10.1007/s12667-016-0222-8
creators_browse_id: 164
creators_browse_id: 151
creators_browse_id: 219
full_text_status: public
publication: Energy Systems
volume: 8
number: 4
pagerange: 857-883
refereed: TRUE
issn: 1868-3975
projects: Economics of climate change adaptation in Europe (ECONADAPT, FP7 603906)
coversheets_dirty: FALSE
fp7_project: yes
fp7_project_id: info:eu-repo/grantAgreement/EC/FP7/603906/EU/Economics of climate change adaptation in Europe/ECONADAPT
fp7_type: info:eu-repo/semantics/article
access_rights: info:eu-repo/semantics/openAccess
citation:   Krasovskii, A. <https://pure.iiasa.ac.at/view/iiasa/164.html> ORCID: https://orcid.org/0000-0003-0940-9366 <https://orcid.org/0000-0003-0940-9366>, Khabarov, N. <https://pure.iiasa.ac.at/view/iiasa/151.html> ORCID: https://orcid.org/0000-0001-5372-4668 <https://orcid.org/0000-0001-5372-4668>, & Obersteiner, M. <https://pure.iiasa.ac.at/view/iiasa/219.html> ORCID: https://orcid.org/0000-0001-6981-2769 <https://orcid.org/0000-0001-6981-2769>  (2017).  CO2 -intensive power generation and REDD-based emission offsets with a benefit-sharing mechanism.   Energy Systems 8 (4) 857-883. 10.1007/s12667-016-0222-8 <https://doi.org/10.1007/s12667-016-0222-8>.       
document_url: https://pure.iiasa.ac.at/id/eprint/13863/1/CO2%20intensive%20power%20generations%20and%20REDD%20based%20emission%20offsets.pdf