Sectoral greenhouse gas offsets can provide the same incentives for emissions reductions as a carbon tax or a cap-and-trade program, with a focus on rewards rather than costs. This paper develops a pilot analysis of such offsets using relatively transparent quantitative methods to estimate a business-as-usual (BAU) emissions path for the gas and basic petrochemical subsidiary of Mexico’s national oil company, Pemex. This BAU path, in turn, may be used as a basis for monetizing emissions reductions via bilateral or international offset transactions, with potentially low transaction costs. Overall, the analysis finds that a 10 percent emissions reduction below baseline would yield about US$40 million in additional revenue over a 13-year period for this Pemex subsidiary at a price of US$10 per ton of carbon dioxide (CO2). Larger emissions reductions, higher offset prices, or expansion to other, larger company units could generate correspondingly higher revenues.
Sectoral Offsets in the Mexican Oil and Gas Industry: Developing a Credible Baseline via Econometric Methods
Mexico’s national oil company serves as a case study to demonstrate that substantial potential exists to use sectoral offsets to achieve cost-effective emissions reductions. But developing a viable baseline against which to credit reductions is key.
Working Paper by Richard D. Morgenstern, Alexander Egorenkov, and Daniel Velez-Lopez — Aug. 20, 2015Download
Richard D. Morgenstern
Marty Weitzman, In Memoriam
Gernot Wagner pays tribute to friend and colleague Marty Weitzman
Resources Radio: Catalyzing Markets toward Sustainability
Kyung-Ah Park, head of environmental markets and innovation in the Sustainable Finance Group at Goldman Sachs, discusses the potential to catalyze markets towards investments in environmentally beneficial products and services.
Press Release — Oct 8, 2019
New Episode of Resources Radio: “Catalyzing Markets Toward Sustainability, with Kyung-Ah Park”
Kyung-Ah Park and Kristin Hayes discuss the powerful potential of environmental markets on this week's episode of Resources Radio.