Conference Agenda

Carbon dioxide removal (CDR) technologies are increasingly recognized as crucial for meeting climate targets, yet their anticipated future deployment may reduce mitigation efforts today. This paper presents a tractable two-generation model to analyze the intergenerational dynamics of CDR and emissions abatement. The model incorporates uncertainty in both CDR costs and climate damages while maintaining analytical tractability, focusing on a present generation choosing abatement levels and a future generation determining CDR deployment. It reproduces key findings from more complex dynamic models and allows to demonstrate that systematic biases -- such as a present bias, or the underestimation of CDR costs or climate damages -- lead to suboptimally low abatement. The model provides a good starting point for future research on the complex interactions between CDR expectations, current mitigation efforts, and climate policy.

Linkages between climate change and biodiversity do exist (Ramsar, 1973). For instance, on the one hand, climate change affects the hydrological cycle which in turn impacts wetlands. On the other hand, wetlands are critical to mitigating climate change. In this paper, we stress the importance of considering simultaneously the issues of climate change and of biodiversity. We provide a long term analysis of optimal pollution control by considering the social planner problem of a polluting country. In order to properly capture the linkages between climate change and biodiversity, we explicitly account for (i) the effect of biodiversity on the natural assimilation of GHG and ii) the effect of GHG concentration on the biodiversity dynamics. We then appraise whether applying this framework affects the

existing long run scenarios for the evolution of GHG concentration. Our results stress that policies derived under wrong scenarios are not only suboptimal but lead to dramatic situations for GHG concentration. Therefore they suggest (i) to call for better information on GHG concentration dynamics and in particular on the effect of biodiversity on these dynamics in order to build better scenarios for GHG concentration dynamics and (ii) to focus on biodiversity issues to mitigate climate change.

This paper examines how (re)labeling changes perception and preference by exploiting an unexpected information shock due to the tightening of air quality standards in South Korea. Since March 2018, PM2.5 concentrations between 35-50 μg/m3 are relabeled from “Normal” to “Bad”, while PM2.5 concentrations between 75-100 μg/m3 are relabeled from “Bad” to “Very Bad”. We link the information shock with a unique data set on the universe of over 6 million housing sales and rental contracts in 2015-2020. An extra day of PM2.5 labeling change from “Normal” to “Bad” and from “Bad” to “Very Bad” over the past 30 days lowers home values by approximately 0.31% ($981) and 0.22% ($703), and rental prices by 0.22% ($25) and 0.25% ($28) per year, respectively. Relabeling not only shifts the Hedonic Price Schedule within the categories, but also steepens it by increasing marginal willingness to pay (MWTPs) for clean air across categories. The relabeling raises MWTPs by 0.0007% ($2.2), 0.0024% ($7.6), 0.0029% ($9.2), 0.0032% ($10.2), and 0.0036% ($11.4) for the “Normal”, “Normal to Bad”, “Bad”, “Bad to Very Bad”, and “Very Bad” categories, respectively. Larger relabeling effects are observed at lower floors and in urban areas compared with their counterparts. Relabeling further improves air quality after 10 months since the information shock. Our findings highlight the role of relabeling in shaping risk perception and preference, contribute to the valuation of information and air quality, and provide important policy implications for the environment, real estate, and beyond.

Biochar is a promising climate mitigation measure that can safely capture and store atmospheric carbon dioxide in soil for many years. In addition to the soil carbon stock enhancement, biochar may have positive effects on crop productivity and fertilizer use. The magnitude of these effects is still uncertain, but they are typically less pronounced in the boreal climate and may change with changing climate. We conduct an economic analysis to assess the economic feasibility of increasing Finnish mineral agricultural soil carbon stock with biochar in an increasingly dry and warm climate scenario. The Monte Carlo simulations showed that it is challenging to achieve economic feasibility with current carbon prices and biochar costs. To make biochar application economically feasible with a carbon subsidy at the level of the European Union Emissions Trading System (EU ETS) carbon price of 88 EUR/t CO₂eq, the cost of biochar material would need to be reduced to less than one-third of its current average price. Alternatively, economic viability could be achieved if the subsidy paid to the farmers was between two to nine times larger than the EU ETS carbon price for the current range of biochar market prices. Lastly, the feasibility can be achieved by simultaneous doubling of the carbon price and halving average biochar cost. Currently, the biochar market is thin and a decrease in biochar cost level is needed to make biochar competitive with other climate change mitigation measures.