Optimal Use of Carbon Sequestration in a Global Climate Change Strategy: Is there a Wooden Bridge to a Clean Energy Future?

Carbon sequestration is believed to “buy time” for technical change in the energy sector. To assess rigorously this widespread argument, we build an intertemporal optimization model where both abatement of fossil fuel emissions and biomass sequestration can be used to mitigate climate change. We confirm that permanent sequestration, if feasible, can be a cost-effective part of an overall climate change mitigation strategy. Optimal use of temporary sequestration depends mostly on the level of marginal damages and much less on expectations about future technical change in the energy sector. Temporary sequestration is unattractive when marginal damages are low.