Our Economics

The Global Carbon index provides a visualization format that bridges the fields of economics and environmental remote sensing and uses productivity data as a proxy for pricing ecosystem goods and services, particularly carbon sequestration. This format employs a standard market productivity time-series design commonly used to track financial instruments such as stocks and mutual funds.

Current industrial use of raw materials includes a pricing policy that routinely neglects external costs. This has resulted in climate change, and engendered “market failure on the greatest scale the world has seen” (Stern, 2007).  Attempts to mitigate the results of this market failure have centered on formulating carbon cap and trade, with carbon priced by quite circuitous means. Carbon pricing is performed inefficiently by centrally-planned market committees using complicated estimates of social value, marginal carbon abatement costs, and a variety of discount rates. This approach to pricing any commodity is contrary to basic economic theory.

There is a demand for sequestration of anthropogenic carbon that is being priced inefficiently. Carbon can be sequestered more safely and reliably in healthy ecosystems than in engineered solutions. Healthy ecosystems also provide substantial external value, including enhanced fresh water resources and increased biodiversity.

Current carbon sequestration efforts are geared toward expensive engineered carbon abatement solutions because these methods provide decision-makers with a definitive, quantifiable product. Terrestrial ecosystem productivity and associated carbon sequestration capacity and value is treated as a resource limited to only a vague and qualitative value. Though rich data exists, a global estimation of carbon sequestration values has not assessed multiple ecosystems on a global scale in monetary terms, and the carbon sequestration services provided by these ecosystems are largely ignored.

The Global Carbon Index uses a traditional stock chart format visualization and a commodities trading annualization approach to assessing ecosystem productivity in order to quantify carbon sequestration values. By making the data simple and accessible, and the calculations and source data transparent, iretaining and enhancing the world's most productive lands becomes a viable alternative for carbon sequestration services.