The economic value of urban soil carbon under competing carbon pricing perspectives in Prague

Abstract

Abstract Urban soil carbon is increasingly incorporated into ecosystem service and climate policy assessments, yet its economic value is commonly reported without an explicit uncertainty range. In this paper, we quantify this uncertainty in urban soil valuation for the Prague Functional Urban Area (rectangular study area centred on Prague) and examine how its sources vary across carbon pricing regimes. The soil organic carbon stock of the upper 0 to 30 cm layer is estimated at 4.15 million tonnes of carbon, with a 90% prediction interval of 1.68 to 8.90 million tonnes. Its estimated median economic value ranges from 0.09 billion EUR under the voluntary carbon market regime to 1.02 billion EUR under the European Union Emissions Trading System and 1.82 billion EUR under the social cost of carbon. Because the value distributions are right-skewed, the expected values, which are the relevant measure for risk-neutral decisions, are higher, at 2.58 to 5.34 billion EUR under two alternative estimates of the social cost of carbon. The source of valuation uncertainty varies markedly across regimes. Soil carbon stock uncertainty accounts for up to 96.7% of the variance under the European Union Emissions Trading System, whereas carbon price uncertainty accounts for at least 52.9% under the social cost of carbon (67.4% under a meta-analytic synthesis). These results suggest that the priority for reducing valuation uncertainty depends on the carbon pricing perspective: improved soil measurements are most informative under market-based pricing, whereas improved carbon damage and price estimates become more important under a social cost of carbon framework. Explicit uncertainty propagation can therefore improve the interpretation and use of urban soil carbon valuations in climate and land-use planning.