American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Do Carbon Offsets Offset Carbon?
American Economic Journal: Applied Economics
vol. 17,
no. 1, January 2025
(pp. 1–40)
Abstract
We develop and implement a new method for identifying wasted subsidies and use it to provide systematic evidence of the misallocation of carbon offsets in the Clean Development Mechanism—the world's largest carbon offset program. Using newly constructed data on the locations and characteristics of over 1,000 wind farms in India, we estimate that at least 52 percent of approved carbon offsets were allocated to projects that would very likely have been built anyway. We estimate that the sale of these offsets to regulated polluters resulted in substantially higher global carbon dioxide emissions.Citation
Calel, Raphael, Jonathan Colmer, Antoine Dechezleprêtre, and Matthieu Glachant. 2025. "Do Carbon Offsets Offset Carbon?" American Economic Journal: Applied Economics, 17 (1): 1–40. DOI: 10.1257/app.20230052Additional Materials
JEL Classification
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- Q42 Alternative Energy Sources
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q58 Environmental Economics: Government Policy
There are no comments for this article.
Login to Comment