Working Paper

Optimal Global Carbon Management with Ocean Sequestration

Kiel Working Papers, 1432

We investigate the socially optimal anthropogenic intervention into the global carbon cycle. The

limiting factor for this intervention is the accumulation of carbon in the atmosphere, which causes

global warming. We apply a simplified two-box model to incorporate aspects of the global carbon

cycle in a more appropriate way than a simple proportional decay assumption does. Anthropogenic

intervention into the global carbon cycle enters the model as the amount of CO2 emitted into the

atmosphere and the amount of CO2 injected into the deep ocean for purposes of sequestration. We

derive a critical cost level for sequestration above which sequestration is just a temporary option or

below which it is the long-run option allowing extended use of fossil fuels. The second option

involves higher atmospheric stabilization levels, whereby the efficiency of sequestration depends on

the time preference and the inertia of the carbon cycle.


Thomas Lontzek


Publication Date
JEL Classification
Q30, Q54