Accounting for sequestered carbon: the question of permanence

In its attempt to provide quantitative limits on greenhouse gas emissions, the Kyoto protocol accepts the principle that sequestration of carbon in the terrestrial biosphere can be used to offset emissions of carbon from fossil-fuel combustion. Whether or not the Kyoto protocol ever comes into force, it is worthwhile to understand how carbon sequestration might be treated in any mitigation plan that provides a tax or ration on carbon emissions. Emission credits, as proposed for the energy sector, are based on the idea that a prevented emission is prevented forever, and emission credits might be traded among parties. In the event that sequestered carbon is subsequently released to the atmosphere, it would be advantageous to agree what the liability is and who assumes that liability. We describe a system whereby emissions credits could be rented, rather than sold, when carbon is sequestered but permanence of sequestration is either not certain or not desired. Our proposal is similar to that offered by the government of Colombia except that it casts these temporary emissions credits into the traditional concepts of rental agreements and it clarifies the opportunities for secondary transactions. A rental contract for emissions credits would establish continuous responsibility for sequestered carbon; credit would be assigned when carbon is sequestered and debits would accrue when carbon is emitted.