Today, there is widespread agreement that we must not only immediately and aggressively decarbonize across the economy but build an accompanying carbon removal (CDR) sector to draw down CO2 from the atmosphere. Carbon removal will need to be a true complement to efforts to stop emissions and end our reliance on fossil fuels. But there remain legitimate and complex questions about how this really happens and carbon removal’s role in climate action — and whether it gives license to polluters to continue to emit. So what is carbon removal really for?

We will need to define what role carbon removal will play in climate policy to ensure that the nascent sector is developed and deployed with science and equity at its core. Carbon180 has been chewing on these existential topics for some time — in this blog we’re sharing what we’ve been discussing with our team and valued partners across the field in an effort to start answering some of CDR’s biggest questions.

Here’s where we got so far, and what we’re going to cover in this blog:

Carbon removal is fundamentally different from carbon offsets, which have long served an outsized, low-impact role in market-based efforts to reach climate goals. Net zero is a pit stop, albeit an important one, on the road to tackling legacy carbon pollution. Advocates and policymakers should think seriously and critically about requiring large industrial emitters to pay to remove any carbon emissions they don’t cut directly while also doubling down on technological innovation and regulatory policy to ensure a path to full decarbonization. In the near term, the federal government can set high standards and buy carbon removal to catalyze the market we need to make this all happen.

Okay. Let’s dive in.

We must be clear-eyed about the difference between carbon removal and conventional offsets

Though voluntary carbon markets may have been initially launched with the best intentions — an economically efficient solution that leveraged private capital to solve a shared problem — they have not lived up to their promise. Today, voluntary markets are dominated by reduction-based carbon offsets, which in theory represent one ton of CO2 that someone, somewhere did not emit. But as governments pursue decarbonization with the goal of eliminating carbon pollution by the middle of this century, the logic of offsets breaks down. Every sector, every firm, and every jurisdiction needs to aim for zero emissions.

Corporations purchase offset credits to make claims about neutralizing their own carbon emissions, from direct electricity use to manufacturing everything in their supply chains. Unsurprisingly, companies face pressure to fulfill their corporate sustainability targets at the lowest possible cost. The result is a market flooded with cheap, low-quality offsets with minimal climate impact or public benefit, and corporations with billions of dollars in credits on their books that are essentially valueless.

Perversely, both sides of the offsets trade are structurally incentivized to look away when it comes to the quality and value of offsets. Suppliers want to sell as many credits as possible, and buyers need only demonstrate that they’ve purchased sufficient credits to match their climate action claims and avoid reputational risk, not that the credits have actually resulted in less harm to the climate.

Moreover, since companies can use this system to effectively shift the responsibility for emissions reductions elsewhere in the world rather than retooling their own facilities, this leaves many frontline communities bearing the brunt of continued local air and water pollution.

We have to go zero, then negative — carbon removal can get us there

The simple math of carbon removal (1 + -1 = 0) is different from offsetting emissions by purchasing reduction credits (1 + 0 = 1). Rather than paying someone else not to pollute, carbon removal credits represent one ton of CO2 already in the atmosphere that is removed and stored durably. Shifting from carbon reductions (aka traditional offsets) to high-quality carbon removal will allow society to achieve net-zero targets and, over time, as governments and businesses reduce their direct emissions as much as possible, move from net-zero to net-negative emissions economies.

With this in mind, carbon removal has two roles to play in addressing climate change.

First, carbon removal projects can suck up carbon dioxide that we’ve pumped into the atmosphere over centuries. This is carbon that’s trapping heat today and fueling the torrent of fires, hurricanes, and other extreme weather that communities around the world are already experiencing. Carbon removal is the only solution available for these legacy emissions.

Second, and what we’re focusing on in this blog, high-quality carbon removal can provide necessary, financially and physically additional drawdown of emissions while old technologies are being phased out and new zero-emissions technologies are built.

Consider a world where large industrial emitters are required to purchase carbon removal to neutralize their residual emissions. Such a federal mandate would make the use of fossil fuels costlier, acting like an effective tax on continuing to emit. This “tax” would incentivize polluters to eliminate their direct emissions to the greatest extent possible, as soon as possible, as this is likely to be easier and cheaper than purchasing high-quality carbon removal for remaining emissions year-over-year. Mandating the purchase of carbon removal is a one-two punch: not only are emitters incentivized to reduce CO2 due to the higher costs of emitting (reducing their “tax” burden), but over and above the effects of a traditional tax, those CDR purchases would directly eliminate any carbon they do emit on the road to complete decarbonization.

Critically, the goal of such a policy should be to drive residual emissions to zero over time. This requires governments to advance a package of economy-wide policies to chart a path to full decarbonization. Policymakers will need to define, quantify, and re-assess residual emissions over time as part of setting emissions reductions targets, and as climate technologies evolve. Those carbon removal purchases that neutralize residual emissions should be phased out quickly as low-carbon technologies advance. They exist to incentivize decarbonization and neutralize what should become a slimmer and slimmer slice of residual emissions — not to allow heavy emitters to keep putting more CO2 into the atmosphere.

Legacy emissions = CO2 already in the atmosphere.

Residual emissions = the difference between an individual facility’s (or an entire industry’s) CO2 emissions and the final target of zero emissions at any given time. That target can be an explicit compliance mandate or an implicit obligation that represents its share of the work towards reaching zero emissions economy-wide.

The federal government can and must help shape a high-quality carbon removal market

Once we establish the role of carbon removal, creating a high-quality carbon removal market will require adopting high performance standards for CDR projects and equitably distributing responsibility for funding the sector’s scale-up. The federal government can play a unique role in these areas.

Both addressing legacy carbon and compensating for limited residual emissions requires a market standard that tells us what it means to permanently remove a ton of carbon that was emitted to the atmosphere from burning fossil fuels. To get there, policymakers must adopt a target “product profile” that is fit for purpose: highly verifiable and highly durable carbon removal that, ton for ton, neutralizes what was emitted and disincentives the continued emission of carbon.

In tandem, the federal government can commit to stepping in as an early buyer of carbon removal. This can be modeled on the public health sector, in which government communicates standards for vaccines coupled with a promise to purchase. As a result, private companies have an incentive to innovate and deliver vaccines that meet those standards knowing they will have a big and stable customer.

Additionally, the federal government can help move the supply of carbon removal to meet high standards through a range of investments in research, development, demonstration, and deployment of new technologies. This can be bolstered by private investors, from big financial institutions to individual contributors, who can support the shift to high-quality carbon removal by investing in innovative removal solutions — not as an offset for corporate emissions, but as a contribution to climate action.

Ultimately, polluters should pay for good carbon removal

A federal mandate that polluters neutralize their residual emissions by paying for high-quality carbon removal is one of the most ambitious — and arguably most equitable and just — climate policies. Taken together, the actions outlined above would lay the groundwork for securing such a policy.

Mandating that large industrial emitters pay for carbon removal will have several benefits, including but not limited to:

  1. Increasing the costs of using fossil fuels and accelerating their replacement.
  2. Rendering moot the claim of infeasibility wherein so-called “hard-to-abate” sectors argue that end-of-pipe technologies for addressing emissions either do not exist or are too costly.
  3. Shifting a significant share of the burden of funding carbon removal at scale from taxpayers alone to polluters.
  4. Reinforcing the case for efforts today to set high standards for the monitoring, reporting and verification of carbon removal so we confidently know what it means to permanently “take back” a ton of fossil carbon emissions that was emitted to the atmosphere.

If done right, carbon removal can be a singular lever for not only incentivizing decarbonization but removing legacy emissions from the atmosphere. Over the next few months, we’ll continue the conversation and explore topics including the policy roadmap we need to secure a “polluter pays” mandate, the role of fossil fuel companies in the CDR sector, and what a net negative economy looks like. Hope to see you there.

Edited by Emily Reich. Image by Jenna Duffy.