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Abstract

Operationalizing a Global Carbon Observing and Analysis System (www.geocarbon. net) would provide a sound basis for monitoring actual carbon fluxes and thus getting quantities right when pricing carbon – be it in a cap-and-trade scheme or under a tax regime. However, such monitoring systems are expensive and—especially in times of economic weakness—budgets for science and environmental policy are under particular scrutiny. In this study, we attempt to demonstrate the magnitude of benefits of improved information about actual carbon fluxes. Such information enables betterinformed policy-making and thus paves the way for a more secure investment environment when decarbonizing the energy sector. The numerical results provide a robust indication of a positive social value of improving carbon monitoring systems when compared to their cost, especially for the more ambitious climate policies.