Carbon offsets out of the woods? The acceptability of domestic vs. international reforestation programmes

Following the 2016 entry into force of the Paris Agreement, governments are now expected to turn their greenhouse gas emissions pledges into concrete climate policies. Given the global public good nature of climate change mitigation and the important differences in cross-country marginal abatement costs, distributing abatement efforts across countries could substantially lower the overall cost of implementing a global climate policy. The choice of the policy instrument is crucial to ensure that the abatement objectives can be reached at a reasonable cost. Economists contend that carbon pricing represents the central pillar of the policy package necessary to transform pledges into effective emissions abatements.