What was I made for?
Exploring and expanding the CDR policy landscape to achieve climate-relevant scale
Recent IPCC assessment reports have made it clear that the world needs gigaton scale carbon removal to meet the goals of the Paris Agreement and avoid severe harm from warming above 1.5 or 2C. In the last decade, a portfolio of carbon removal solutions have emerged to meet this need, each with its own benefits, drawbacks, costs, and opportunities (or limitations) to scale. Growth in the carbon removal ecosystem has been driven in large part by a “flight to quality” in the voluntary carbon market, where corporations purchase carbon credits to offset their emissions and meet their sustainability goals.
But carbon removal is a public good, and the voluntary carbon market alone lacks sufficient demand pull to achieve necessary scale. Increasingly, governments are stepping in to support carbon removal research, development, and deployment along the entire innovation pipeline. The CDR policy playbook borrows heavily from the innovation support framework created for other cleantech, like solar and batteries, to drive down the cost curve and improve market adoption.
The Innovation Policy Playbook
There are four main types of innovation support, appropriate for technologies of increasing market readiness: basic research, supply push, demand pull, and quality infrastructure. Basic research support, like grants for applied science, enables the earliest stages of technology development. For example, through the Department of Energy’s (DOE) CDR MRV Lab Call program, NREL’s research will improve our understanding of the durability of biomass storage modalities. Next, supply push policies help new technologies enter the market and compete with incumbents. For example, through the Carbon Negative Shot Pilots, DOE is providing cost-share for technology demonstrations which generate saleable carbon credits. Then, demand pull policies stabilize price and volume in the market, helping larger projects reach a final investment decision. For example, the UK is starting the process of integrating CDR into its Emissions Trading Scheme, a cornerstone of the UK’s overall climate policy, which would provide a clear demand and price signal to the market.
Lastly, quality infrastructure — policies, organizations, and legal frameworks that build trust in an industry and the claims associated with its products — reduce cost and increase the volume of transactions in the market. For example, the EU Carbon Removal and Carbon Farming Certification framework will set a quality bar for carbon removal credits and make it easier for corporations to identify high-quality projects. In this way, quality infrastructure does double duty as a form of demand pull, crowding additional investment into an increasingly mature market.
We must use the full suite of innovation policy options to support the deployment of carbon removal solutions and the growth of voluntary and compliance markets for CDR. There’s just one (particularly big, extremely hairy) problem: carbon markets alone will not be enough to achieve the scale and speed of CDR deployment the world needs, even with substantial government support.
To meet our climate goals and achieve gigaton scale, in aggregate, we need to think beyond carbon credits and carbon markets. Staying fully inside the crediting paradigm is a little bit like saying the only way to protect forests is to turn every tree into an offset. No one seriously thinks that is the solution to forest conservation. Carbon markets are just one — useful but often limited — tool in our climate policy toolkit. Oddly, we talk about durable CDR in this way. In doing so, we limit our ability to identify new industrial integrations and policy opportunities for carbon removal, with potentially dire consequences for the planet.
Just to be clear: We absolutely need to scale the voluntary carbon market and reward companies for purchasing high-quality carbon removal credits in the near-term. We also need to integrate carbon removal into sectoral and economy-wide carbon pricing mechanisms, like cap-and-trade schemes, because carbon pricing is one of the most effective climate policies. Governments can support the former (voluntary corporate commitments) while implementing the latter (compliance markets).
But the world needs more.
Demand, Unlocked
At CRSI, we want to support the next phase of CDR policy development. We want to expand our thinking beyond the crediting paradigm and ask: What can CDR be used for? And how will we quantify and pay for that service? Said another way, how do we leverage what we learn in today’s carbon markets to generate sustained, long-lasting carbon removal projects and activities that run in the background like basic infrastructure?
That’s why we’ve organized our Quantification Resources Database and our Policy Dashboard tool to be policy-mechanism-agnostic. For quantification resources, we look at carbon fluxes between reservoirs, breaking down crediting methodologies and protocols into their fundamental, physical processes. There can be more than one way to incentivize transfer of carbon from one pool in the Earth system to another.
For the Policy Dashboard, we’ve categorized policies using a range of potential “use cases” including: climate diplomacy and national claims based on national greenhouse gas inventories, corporate sustainability claims based on firm-level accounting, opportunities for net-GHG negative natural resource management, residual emissions management (e.g. offsetting so-called hard-to-abate industrial emissions), and — by far the most common policy type today — innovation support. (You can read more about the use cases here.) As policymakers, NGOs, and community-based organizations think of new ways to build, monitor, and maintain carbon removal projects, we’ll add to and refine this list of policies mechanisms and potential CDR use cases.
And we’re starting now. Share your thoughts on additional policies, use cases, and quantification resources at database@carbonremovalstandards.org.