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Carbon Banks
Author(s) -
Esuola Adeyemi G.,
Weersink Alfons
Publication year - 2006
Publication title -
journal of environmental quality
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.888
H-Index - 171
eISSN - 1537-2537
pISSN - 0047-2425
DOI - 10.2134/jeq2005.0197
Subject(s) - business , environmental science
Carbon sequestration is one of the options that can be used to reduce atmospheric carbon, but its use in an offset market is complicated by the temporary nature of sequestered carbon and the risks associated with carbon release and price. In this paper a carbon bank is proposed to handle these problems. The bank is both an aggregator and a risk bearer. Sink generators deposit their credits with the bank and are paid for maintaining their “savings” with the bank. The carbon bank is also the source where large‐scale emitters can come and buy either a temporary or permanent credit and pay the bank in return for the credit and services provided. The advantages of the bank over alternative institutional designs include lower transaction costs, flexible carbon credits and price, and lower risk to risk‐averse parties. The carbon bank could be an effective means to deal with many of the unresolved issues within the forthcoming Canadian offset system.

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