Operationalizing the net-negative carbon economy - Nature.com

Abstract

The remaining carbon budget for limiting global warming to 1.5°C will likely be exhausted within this decade^1,2. 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.

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Author information

Affiliations

1. International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria

   Johannes Bednar, Michael Obersteiner, Artem Baklanov, Fabian Wagner & Oliver Geden

2. School of Geography and the Environment, University of Oxford, Oxford, UK

   Johannes Bednar, Michael Obersteiner, Myles Allen & Jim W. Hall

3. HSE University, St. Petersburg, Russian Federation

   Artem Baklanov

4. National Center for Ecological Analysis and Synthesis (NCEAS), University of California, Santa Barbara, CA, USA

   Marcus Thomson

5. German Institute for International and Security Affairs, Berlin, Germany

   Oliver Geden

Authors

1. Johannes Bednar
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2. Michael Obersteiner
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3. Artem Baklanov
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4. Marcus Thomson
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5. Fabian Wagner
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6. Oliver Geden
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7. Myles Allen
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8. Jim W. Hall
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Corresponding author

Correspondence to Johannes Bednar.

Supplementary information

Supplementary Information

This file contains a graphical representation of all 2°C (RCP2.6) emission pathways discussed in the Results (specifically in Figure 3).

Supplementary Data

This file contains the data of all 2°C (RCP2.6) pathways discussed in the Results as Excel sheet.

Supplementary Information

SI1.3 contains a graphical representation of all 1.5°C (RCP1.9) emission pathways discussed in the Results (specifically in Figure 4 and Extended Data Figures 7-9).

Supplementary Data

This file contains the data of all 1.5°C (RCP1.9) pathways discussed in the Results as Excel sheet.

Supplementary Information

This file contains a graphical representation of the marginal abatement cost (MAC) curves used in the numerical model of this study. The parameters of the MAC curves can be retrieved with the R package provided for using the numerical model.

Supplementary Information

This file illustrates carbon prices from the SSP scenarios compared to carbon prices and MAC from the numerical model of this study.

Supplementary Information

This file illustrates consumption loss and GDP loss from the SSP scenarios compared to abatement costs from the numerical model of this study.

Supplementary Information

This file illustrates net emissions from the SSP scenarios compared to net emissions from the numerical model of this study.

Supplementary Information

This file contains the analytical methods necessary to derive equation [16] in the Methods section.

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Bednar, J., Obersteiner, M., Baklanov, A. et al. Operationalizing the net-negative carbon economy. Nature (2021). https://ift.tt/3hMotGV

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• Received: 12 December 2019

• Accepted: 09 June 2021

• Published: 08 July 2021

• DOI: https://doi.org/10.1038/s41586-021-03723-9

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