NCX (as lead author) has come out with a new paper on the time value of carbon storage, and will no doubt be using the peer-reviewed paper to push the ton-year accounting it is trying to get approved by offset registries for its improved forest management carbon offset projects.

First, let me stipulate as to the ability to calculate a "time value of carbon" if you start with a dollar estimate of the Social Cost of Carbon and a positive discount rate (as the paper notes). In that context you can clearly come up with the economic value of delaying the emission of a ton of CO2, and from there it's "just math" to come up with a ton-year value, and I have no doubt that the authors got the math right. But should we care when it comes to mitigating climate change?

You could use the same math, for example, to calculate the number of carbon offsets we could generate if everyone on the planet held their breath for 15 seconds. And yet such a carbon offset methodology would strike most people as preposterous.

The issue here is akin to one we often face in interpreting statistical significance. If I take a medication that reduces my risk of death from .1 to .0999, that might be statistically significant but it's probably not medically meaningful, I would probably look for a more appropriate medication. Ton-year accounting may be mathematically accurate (based on a willingness to discount the future), but does it promote climate change mitigation? That's a MUCH tougher question to answer, especially given its potential downsides, including:

- It encourages us to think about climate change as an accounting challenge - it's not.
- It encourages gaming of carbon offset markets, and will facilitate the entry of non-additional and "leaky" tons into carbon offset markets by supposedly "solving" the permanence problem.

Let's look at a bit of math in the context of additionality. The paper estimates that at a $50 social cost of carbon, the value of delaying a ton of CO2e equivalent for one year is about $1.60 (given discount rate and other assumptions). But what is the economic cost of foregoing that harvest to the landowner? By my crude estimate that's less than 10% of the carrying cost associated with not cutting the timber today and pocketing the proceeds.

The bottom line is that despite the math, do we really want companies to be able to say they have achieved net zero emissions, or on track for net zero emissions, on the basis of spending $1.50 to rent a ton of CO2 for that year (assuming the project is additional and leak-proof (both heroic assumptions)). That's the real question, and it's not addressed in the article.