Why does the edition call the dynamic inverted?

Because the scarcity of a common resource increases its value, while for carbon dioxide it is the excess that increases the value and demand for its removal.

Which names does the edition give to this resource?

Carbon offset and carbon removal, which it calls related but distinct concepts, both generating carbon credits.

Is the resource inflationary or deflationary, for the edition?

Both: the growing excess drives demand, and if the excess is neutralized the demand diminishes. The edition adds that the atmosphere does need some CO2 to function.

Concept

Removal of CO2 as a Resource

What is "Removal of (CO₂)" in Issue.11?

In Issue.11, "Removal of (CO₂)" is the name the author gives to the resource behind carbon markets: because the atmosphere holds an excess of carbon dioxide, what has value and demand is not more supply of anything but the removal of that excess.

In short

Issue.11 starts from the economists' maxim that supply creates its own demand and argues that it does not apply to carbon dioxide: there is no demand for more CO2, nor for more oxygen; we just need less CO2 in the atmosphere. The true resource, the supply and the demand are therefore the removal of CO2. Where the scarcity of a common resource increases its value, here the excess of CO2 increases the value and demand for its removal, an inverted dynamic. The edition says this resource is known by two names, carbon offset and carbon removal, related but distinct concepts it does not separate, and that both generate carbon credits. It then reads the resource through the same framework it applies to Bitcoin: supply and demand, value, utility and distribution.

Key facts

Why does the edition call the dynamic inverted?: Because the scarcity of a common resource increases its value, while for carbon dioxide it is the excess that increases the value and demand for its removal.
Which names does the edition give to this resource?: Carbon offset and carbon removal, which it calls related but distinct concepts, both generating carbon credits.
Is the resource inflationary or deflationary, for the edition?: Both: the growing excess drives demand, and if the excess is neutralized the demand diminishes. The edition adds that the atmosphere does need some CO2 to function.

What is the removal of CO2?

Removing carbon dioxide means taking CO2 out of the atmosphere, for example by capturing and storing it in plants and soil. In Issue.11, the resource covers both the carbon dioxide a company stops producing by reducing its emissions and the carbon stored in plants and soil by agriculture; both can be measured, verified and turned into carbon credits, which are traded in carbon markets.

How does Issue.11 use it?

The edition treats "Removal of (CO₂)" as an intangible resource like Bitcoin: not a piece of paper you can touch, but data, a set of traceable information that validates its value. It argues that technology companies, which have limited direct interaction with nature, will mostly buy it, while agriculture companies are in a position to generate a lot of it, since crops and plants store carbon in the soil; what is generated but not measured cannot be validated nor sold.

Source editions

Where this entry comes from in the Agency editorial.

Issue.11 - A Catalyst for EconomyApril 6, 2023Read the edition

Also from these editions: concepts

Also from these editions: terms

Related terms

intangibleadjective: Incapable of being perceived by touch or physical senses, yet possessing recognizable economic or conceptual worth.
supply chainnoun: The complete sequence of processes, entities, and facilities involved in producing and distributing a commodity.
surplusnoun: An amount of an asset, commodity, or resource that exceeds what is strictly utilized or demanded.