Title: Short-lived gasses, carbon markets and climate risk mitigation
Abstract: We study the problem of climate risk mitigation with finite horizon global temperature targets and in the presence of economic sectors generating greenhouse gasses with different warming potential and temporal persistency. We investigate how the notion of carbon equivalence influences firms' abatement strategies and long term climate risk mitigation goals when carbon markets can be used to trade short-lived gasses against long-lived ones. The findings are used to identify how emission metrics may be vulnerable to greenwashing and undermine climate risk mitigation policies.
This is joint work with Sara Biagini (LUISS Rome) and Kaveh Salehzadeh Nobari (Imperial).