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Summary of "Policy Incentives to Scale Carbon Dioxide Removal: Analysis and Recommendations"

Core Content

This report by James Boyd, Emily Joiner, Alan Krupnick, and Michael Toman from Resources for the Future (RFF) analyzes the role of carbon dioxide removal (CDR) in achieving net-zero greenhouse gas (GHG) emissions in the United States by midcentury. It highlights the urgent need for policy incentives to scale up CDR technologies, which are essential to complement emissions reductions and address the "removal gap" that exists due to current insufficient CDR efforts.

Main Viewpoints

• Net Zero Requirement: Achieving net-zero emissions requires both deep emissions reductions and CDR to offset residual emissions. Without significant CDR, meeting the Paris Agreement's temperature goals is unlikely.
• CDR Technologies: The report outlines various CDR technologies, including conventional and novel methods, and evaluates their costs, scalability, and deployment challenges.
• Policy Gaps: Current US policies focus on near-term investments but lack comprehensive frameworks to scale up CDR over the long term.
• Cost-Effectiveness: Policies should aim to minimize the overall cost of CDR, including technological, monitoring, and social costs.
• Technology Neutrality: CDR policies should be designed to reward performance across different technologies rather than favoring one over another.
• Equity and Environmental Justice: Policies must address the social and environmental impacts of CDR, including community concerns and environmental consequences.

Key Information

1. Carbon Dioxide Removal (CDR) Overview

CDR refers to the deliberate removal of atmospheric CO₂ and its durable storage in land, ocean, geologic, or product reservoirs. It is distinct from natural processes and emissions reduction strategies like avoided deforestation.

2. Technological Options

• Afforestation, Reforestation, and Improved Forest Management (ARI): Conventional approach, already deployed at scale but with limited capacity. Costs range from $10 to $100/tCO₂.
• Biochar (BC): Carbon-dense material formed by heating biomass. Costs estimated between $30 to $120/tCO₂.
• Biomass Carbon Removal and Storage (BiCRS): Includes ocean iron fertilization and biomass storage. Costs not well documented, but some estimates suggest $20 to $50/tCO₂ for storage.
• Bioenergy with Carbon Capture and Storage (BECCS): Combines bioenergy production with carbon capture and storage. Costs range from $50 to $200/tCO₂, depending on feedstock and scale.
• Direct Air Capture and Storage (DACCS): Uses chemical processes to capture CO₂ directly from the air. Costs are significantly higher, ranging from $90 to $600/tCO₂.
• Enhanced Weathering (EW) and Ocean Alkalinity Enhancement (OAE): Early-stage technologies that alter the chemistry of land or ocean to absorb more CO₂. Costs are estimated between $60 to $200/tCO₂ for EW and $72 to $159/tCO₂ for OAE.

3. Policy Recommendations

6.1. Increase Conventional Land-Based CDR

• Expand ARI through subsidies and incentives for afforestation, reforestation, and improved forest management.
• Address land-use trade-offs and ensure sustainable practices.

6.2. Catalyze Investment in DAC and BEC Technologies

• Provide financial incentives and RD&D support to accelerate the deployment of DAC and BECCS.
• Encourage private investment through tax credits and public-private partnerships.

6.3. Govern CO₂ Transportation and Storage

• Develop regulatory frameworks for CO₂ pipelines, storage facilities, and transport.
• Ensure safe and efficient infrastructure to support large-scale CDR.

6.4. Benefits Sharing

• Implement mechanisms to ensure equitable distribution of benefits from CDR.
• Address concerns about environmental justice and local impacts.

6.5. Ancillary Environmental Consequences

• Consider the broader environmental effects of CDR technologies, including land use changes and water consumption.

7.1. Cost-Effective CDR and Emissions Reduction

• Prioritize cost-effective CDR and emissions reduction strategies.
• Explore combinations of CDR and emissions reduction (ER) to meet net-zero targets.

7.2. Cap-and-Trade or Carbon Pricing with CDR (CAT+ and CP+)

• Recommend integrating CDR incentives into existing GHG mitigation frameworks.
• Consider carbon pricing mechanisms that include CDR to drive investment.

7.3. Midcentury CDR Policy Architecture

• Propose a more ambitious policy structure to support scaling up CDR technologies.
• Focus on expanding both conventional and novel CDR approaches.

7.4. Other Policy Scenarios

• Explore alternative policy frameworks, including public investment and regulatory reforms.

7.5. Overshooting and Net-Negative Emissions

• Address the possibility of emissions overshooting temperature targets and the need for net-negative emissions beyond midcentury.

7.6. Sequencing of ER and CDR Policies

• Recommend a phased approach to policy implementation, prioritizing ER first, followed by CDR.

4. Challenges and Barriers

• Technological Barriers: Novel CDR technologies like DAC and BECCS are expensive and not yet deployed at scale.
• Social and Environmental Barriers: CDR can have negative community impacts, including land use changes and local pollution.
• Regulatory and Permitting Barriers: Lack of clear regulatory frameworks for CO₂ transport and storage.
• Cost and Scalability: Significant investment and innovation are needed to reduce costs and scale up CDR technologies.

5. US Policy Position

• The US has an existing, though limited, suite of CDR incentives.
• It has a strong position to lead in CDR deployment due to its wealth, technological capacity, and land availability.
• US policies will have international implications, particularly regarding the use of CDR projects abroad for offsetting emissions.

Conclusion

The report emphasizes the critical role of CDR in achieving net-zero emissions and the need for comprehensive, cost-effective, and equitable policies to scale up its deployment. While current policies provide a starting point, they must be fortified and expanded to support both near-term and long-term CDR goals. The US is well-positioned to lead in this effort, but it must address technological, social, and regulatory challenges to ensure the success of CDR initiatives.