CARE Seminar: Anna Russo, Harvard

Speaker

Anna Russo, Harvard

Biography

I am a Junior Fellow at the Harvard Society of Fellows. In 2026, I will be an Assistant Professor of Economics at Harvard University.

My research fields are environmental economics, public finance, industrial organization, and market design.

Title

"Selection and Scale in Carbon Offset Markets"

Abstract

Carbon offsets are intended to facilitate trade between suppliers of low-cost abatement and buyers who value emissions reductions. We show that offset markets suffer from failures on both sides of the market that interact to limit gains from trade and evaluate remedies. On the supply side, voluntary entry with imperfect measurement generates adverse selection: using data on more than 400 land-use projects, we find participating projects are over-credited by roughly an order of magnitude. On the demand side, pooled contracts unravel consistent with quality concerns, while buyers also exhibit preferences for nominal market scale independent of environmental impact. We embed these results in a model of land use, crediting, and offset trade. Over-crediting sustains trade under the status quo: imposing unbiased crediting limits trade in both voluntary and compliance offset markets—even in high-price regulated markets—despite realizable welfare gains. Subsidies are required to preserve trade and environmental integrity while maintaining incentives to improve measurement.