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  5. Do Carbon Offsets Offset Carbon?

American Economic Journal:
Applied Economics

ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)

Do Carbon Offsets Offset Carbon?

  • Raphael Calel
  • Jonathan Colmer
  • Antoine Dechezleprêtre
  • Matthieu Glachant
American Economic Journal: Applied Economics (Forthcoming)

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% 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.

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