Ghaleigh et al. (2023): Beyond emissions trading to a negative carbon economy: A proposed Carbon Removal Obligation and its implementation
Navraj Singh Ghaleigh, Johannes Bednar, Justin Macinante, Michael Obersteiner IN: Climate Policy, https://www.research.ed.ac.uk/en/publications/beyond-emissions-trading-to-a-negative-carbon-economy-a-proposed-
A policy framework based on ‘carbon removal obligations’ (CROs) has been proposed by the authors to respond to concerns about the financial and fiscal viability, the lack of incentives for CDR uptake, as well as the physical and technological risks associated with any climate mitigation scenario that relies on large scale CDR. Here the authors propose an updated and improved CRO policy framework, consisting of two core elements: the ‘principal CRO mechanism’ obliges emitters of a tonne of CO2 to remove a tonne of CO2 at the time of maturity of the CRO. On top of this obligation, CRO holders need to pay a fee. This ‘CRO pricing instrument’, introduced in detail here, is used by regulators to steer the carbon emissions and removals pathways. The update suggests that markets for CDR under the CRO framework should operate independently from markets for emission reductions (ERs), such as emission trading schemes.