Advancing Effective and Equitable Crediting for Natural Climate Solutions: Equity Considerations on the Demand Side of NCS Crediting

Environmental Defense Fund Economics Discussion Paper Series, EDF EDP 23-03, August 2023

25 Pages Posted: 8 Aug 2023

See all articles by Julia Ilhardt

Julia Ilhardt

Environmental Defense Fund

Nina Randazzo

Environmental Defense Fund

Fern Uennatornwaranggoon

Environmental Defense Fund

Devyani Singh

Environmental Defense Fund

Date Written: July 21, 2023

Abstract

Significant equity considerations arise around both the generation and use of emissions reductions associated with Natural Climate Solutions (NCS) carbon credits. This paper focuses on the demand side, referring to the use of carbon credits generated through NCS for compliance with regulatory obligations or to meet voluntary commitments. Topics include the impacts of credit use on local co-pollutants, disparities in environmental burdens between communities, and the distribution of benefits. In many cases, demand-side equity considerations for NCS credits overlap with those for carbon credits and carbon pricing more broadly. The paper begins by explaining the dimensions of equity in the realm of environmental policies, then examines the academic literature relevant to the demand-side of NCS credits, considering case studies in both compliance and voluntary markets. The authors provide proposed and implemented solutions to ameliorate inequities in the context of carbon pricing and crediting.

Keywords: Natural Climate Solutions, equity

JEL Classification: Q51, Q53, Q56

Suggested Citation

Ilhardt, Julia and Randazzo, Nina and Uennatornwaranggoon, Fern and Singh, Devyani, Advancing Effective and Equitable Crediting for Natural Climate Solutions: Equity Considerations on the Demand Side of NCS Crediting (July 21, 2023). Environmental Defense Fund Economics Discussion Paper Series, EDF EDP 23-03, August 2023, Available at SSRN: https://ssrn.com/abstract=4529779 or http://dx.doi.org/10.2139/ssrn.4529779

Julia Ilhardt (Contact Author)

Environmental Defense Fund ( email )

1875 Connecticut ave
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Nina Randazzo

Environmental Defense Fund

1875 Connecticut ave
257 Park Avenue South
Washington, DC 20009
United States

Fern Uennatornwaranggoon

Environmental Defense Fund

1875 Connecticut ave
257 Park Avenue South
Washington, DC 20009
United States

Devyani Singh

Environmental Defense Fund

1875 Connecticut ave
257 Park Avenue South
Washington, DC 20009
United States

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