eprintid: 14457
rev_number: 14
eprint_status: archive
userid: 353
dir: disk0/00/01/44/57
datestamp: 2017-03-06 14:40:47
lastmod: 2021-08-27 17:28:42
status_changed: 2017-03-06 14:40:47
type: conference_item
metadata_visibility: show
item_issues_count: 3
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: Fair pricing of REDD-based emission offsets under risk preferences and benefit-sharing
ispublished: pub
divisions: prog_esm
abstract: We consider a risk-aware forest owner and electricity producer evaluating the Reduced Emissions from Deforestation and Degradation (REDD)-based offsets with a benefit-sharing mechanism under uncertain CO2CO2 prices. For a range of CO2CO2 prices and respective risks perceived by the forest owner (seller) and electricity producer (buyer), we apply a model of fair (indifference) pricing. Parties’ risk preferences are reflected by exponential utility functions. The potentially contracted amounts of REDD offsets are analyzed under various risk preferences and for different benefit-sharing opportunities. Our results show that a risk-averse attitude considerably increases the contracted offset amounts (compared to risk-neutral case) and, therefore, creates a higher potential for REDD implementation. We demonstrate possible situations, when parties could agree on a certain range of REDD contracts, e.g. smaller amounts of REDD offsets are traded for higher prices, and larger amounts – for lower prices, although contracting a moderate amount at a moderate price is impossible. The suggested benefit-sharing mechanism can help increase contracted offset amounts. Our modeling results highlight two ways to promote higher REDD participation: (i) strengthening the carbon price signal to reveal risk-averse behavior of energy producers, and (ii) implementing the mechanism of benefit/risk sharing between the REDD consumer and supplier.
date: 2017-02-27
date_type: published
creators_browse_id: 164
creators_browse_id: 151
creators_browse_id: 219
full_text_status: public
pres_type: other
event_title: IIASA Institutional Evaluation 2017
event_location: IIASA, Laxenburg, Austria
event_dates: 27 February-1 March 2017
event_type: other
refereed: FALSE
coversheets_dirty: FALSE
fp7_project: no
fp7_type: info:eu-repo/semantics/conferenceObject
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).  Fair pricing of REDD-based emission offsets under risk preferences and benefit-sharing.   In: IIASA Institutional Evaluation 2017, 27 February-1 March 2017, IIASA, Laxenburg, Austria.     
document_url: https://pure.iiasa.ac.at/id/eprint/14457/1/2016-06-15-Presentation-Video-EnergyPolicy-10.1016_j.enpol.2016.05.040.mp4