Operationalizing the net-negative carbon economy

Bednar, J., Obersteiner, M. ORCID: https://orcid.org/0000-0001-6981-2769, Baklanov, A. ORCID: https://orcid.org/0000-0003-1599-3618, Thomson, M., Wagner, F. ORCID: https://orcid.org/0000-0003-3429-2374, Geden, O., Allen, M., & Hall, J.W. (2021). Operationalizing the net-negative carbon economy. Nature 596 377-383. 10.1038/s41586-021-03723-9.

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Project: Effects of phosphorus limitations on Life, Earth system and Society (IMBALANCE-P, FP7 610028), FWF grant P-31796 Medium Complexity Earth System Risk Management (ERM).


The remaining carbon budget for limiting global warming to 1.5°C will likely be exhausted within this decade. Carbon debt3 generated thereafter will need to be compensated by net negative emissions4. However, economic policy instruments to guarantee potentially very costly net carbon-dioxide removal (CDR) have not yet been devised. Here, we propose intertemporal instruments to provide the basis for widely applied carbon taxes and emission trading systems to finance a net negative carbon economy5. We investigate an idealized market approach to incentivize repayment of previously accrued carbon debt by establishing emitters’ responsibility for net carbon removal through ‘Carbon Removal Obligations’ (CROs). Inherent risks, such as the default risk of carbon debtors, are addressed by pricing atmospheric CO2 storage through interest on carbon debt. In contrast to the prevailing literature on emission pathways, we find that interest payments for CROs induce substantially more ambitious near-term decarbonization complemented by earlier and less aggressive deployment of CDR. We conclude that CROs will need to become an integral part of the global climate policy mix if we are to ensure the viability of ambitious climate targets and an equitable distribution of mitigation efforts across generations.

Item Type: Article
Research Programs: Advancing Systems Analysis (ASA)
Advancing Systems Analysis (ASA) > Exploratory Modeling of Human-natural Systems (EM)
Energy, Climate, and Environment (ECE)
Energy, Climate, and Environment (ECE) > Pollution Management (PM)
Energy, Climate, and Environment (ECE) > Transformative Institutional and Social Solutions (TISS)
Depositing User: Michaela Rossini
Date Deposited: 09 Jul 2021 08:05
Last Modified: 14 Mar 2022 13:28
URI: https://pure.iiasa.ac.at/17312

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