sEcoCarbonMarkets

Integrating ecosystems in carbon markets

First meeting: tba

iDiv member:
Nadja Rüger
Nico Eisenhauer
Christian Wirth

Project summary:
Carbon dynamics are at the heart of the connection between biodiversity and climate change. Economists almost uniformly agree that pricing carbon is key for achieving the transition to low-carbon economy, and in line with this, emission trading systems and other carbon pricing approaches are gaining traction. In parallel, nature-based solutions, i.e., using the capacity of ecosystems to sequester CO2 and thus contribute to mitigating climate change, are being required to achieve net-zero and even net-negative emissions targets. Integrating ecosystems into carbon markets may help implement nature-based solutions at a large scale. Given the high and increasing carbon prices, this will drastically alter the economic incentives for ecosystem use and management, especially in forests and open land, because the economic value of carbon stored in biomass and soils is of similar or higher magnitude as current net revenues from biomass yield. In three workshops, we will bring together economists and ecologists to (1) synthesize the potential and limitations of applying current ecosystem carbon budgeting approaches for carbon pricing, and propose ways forward; (2) synthesize knowledge from ecological-economic models and econometric analysis on how the integration of forest- and open land-ecosystems into carbon markets would change the economic incentives for managing these ecosystems, and explore potential repercussions on biodiversity; (3) derive insights and recommendations how to design carbon markets – with respect to the integration of ecosystems – in order to maximize nature-based climate change mitigation potential and economic benefits from ecosystem use while safeguarding biodiversity.

In person participants: tba

Remote participants: tba