Kenneth M. ChomitzFranck Lecocq2014-03-272014-03-272003-12https://hdl.handle.net/10986/17430Temporary crediting of carbon storage is a proposed instrument that allows entities with emissions reductions obligations to defer some obligations for a fixed period of time. This instrument provides a means of guaranteeing the environmental integrity of a carbon sequestration project. But because the user of the temporary credit takes on the liability of renewing it, or replacing it with a permanent credit, the temporary credit must sell at a discount compared with a permanent credit. The authors show that this discount depends on the expected change in price of a permanent credit. Temporary credits have value only if restrictions on carbon emissions are not expected to tighten substantially. The intuition is illustrated by assessing the value of a hypothetical temporary sulfur dioxide sequestration credit using historical data on actual sulfur dioxide allowance prices.en-USCC BY 3.0 IGOCARBON REDUCTION STRATEGIESSULPHUR DIOXIDEPLANTATIONSAGROFORESTRYSEQUESTRATIONFUTURES MARKETSCOST EFFECTIVENESS ABATEMENTACCOUNTINGALLOWANCE MARKETSATMOSPHEREBANKRUPTCYCALCULATIONCARBONCARBON ACCUMULATIONCARBON CREDITCARBON CREDITSCARBON EMISSIONSCARBON LIABILITIESCARBON MARKETSCARBON PRICESCARBON PROJECTSCARBON SEQUESTRATIONCARBON STORAGECERTIFICATION PROCESSCLEAN AIRCLIMATECLIMATE CHANGECLIMATE POLICYCO2DEFORESTATIONDISCOUNT RATESDIVERGENCEECONOMIC DEVELOPMENTEMISSIONEMISSION REDUCTIONEMISSION REDUCTIONSEMISSIONSEMISSIONS CREDITSEMISSIONS OFFSETSEMISSIONS REDUCTIONSEMISSIONS REDUCTIONS OBLIGATIONSENERGY EFFICIENCYENVIRONMENTAL ECONOMICSENVIRONMENTAL INTEGRITYENVIRONMENTAL POLICYEQUILIBRIUMFOREST MANAGEMENTFORESTRYFRAMEWORK CONVENTION ON CLIMATE CHANGEGREENHOUSE GASINCOMEINSURANCELAND USEMARGINAL ABATEMENTMARGINAL ABATEMENT COSTMARKET VALUENATURAL FORESTSOVERHEAD COSTSPOLLUTIONPPPROFITABILITYRISK ASSESSMENTSINKSO2SULFURSULFUR DIOXIDESULFUR DIOXIDE ALLOWANCESTECHNOLOGICAL CHANGETRANSACTION COSTSURBANIZATIONWOOD PRODUCTS10.1596/1813-9450-3181