2009, Held, Hermann, Edenhofer, Ottmar

Geological sequestration of CO2 on a massive scale implies that large area fractions of the underground could become flooded by CO2, imposing a unprecedented regulatory challenge to environmental authorities. Therefore we propose carbon sequestration bonds as complementary, market-based instruments that should further help to manage the risk of decadal-scale CO2 leakage. Such bond schemes address market failures that could occur if the investment behavior of operators under uncertainty differed from society’s preference. For a stylized setup we demonstrate that our bond system has the potential to simultaneously address regulatory challenges stemming from information asymmetries and diverging orders of preference.

2021, Rockström, Johan, Beringer, Tim, Hole, David, Griscom, Bronson, Mascia, Michael B., Folke, Carl, Creutzig, Felix

[no abstract available]