Marcus Thomson, a postdoctoral scholar at the National Center for Ecological Analysis & Synthesis at UC Santa Barbara is a co-author of a research article just published in Nature that presents a scheme to slow global warming by tying CO2 emissions to carbon removal obligations.
The most recent attempt to cooperatively limit global greenhouse gas emissions was COP21 in 2015, which resulted in the Paris Agreement, whereby individual countries pledge to reduce their emissions in order to keep global warming to no more than +1.5°C and “well below” 2°C.
For the Paris Agreement to have any hope of succeeding, and for dangerous global warming to be avoided, it will be necessary to actively remove CO2 from the atmosphere, in addition to limiting emissions. Technically, once the remaining carbon budget is depleted, for every ton of CO2 added to the atmosphere, it will be necessary to remove a ton of CO2 later this century.
In other words, should emissions continue after the carbon budget is depleted—which is inevitable—the budget will go negative, and we will begin accruing a carbon debt. The greater this carbon debt grows, the faster and more dramatically the climate will change.
There is no uniform global strategy for national and sub-national governments, public organizations and private companies to pay down this carbon debt. This raises the risk that future generations will be unfairly burdened with massive debt, and challenges any long-term strategy to limit warming to +1.5°C. In short, in spite of near universal agreement on the need to achieve net-zero emissions, there remains a significant challenge to operationalize concerted action.
In the case of an idealized global emissions trading scheme, emission caps become more stringent as the carbon budget is depleted. For existing schemes, like that used by the European Union, this would mean reducing the quantity of currently scheduled emissions allowances. This risks making the whole scheme economically and politically untenable.
The reduced number of allowances would, however, be compensated by Carbon Removal Obligations (CROs), obligating emitters to remove an equivalent quantity of CO2 in the future instead of paying a carbon price now. In the plan, carbon debt would be managed through CROs which establish legal responsibility for carbon debt repayment.
Emission trading schemes backed by CROs carry the risk of default by debtors. The authors propose that the carbon debt be treated like financial debt which includes interest on carbon debt. Interest payments would be treated as a rental fee for temporarily storing CO2 in the atmosphere. Additionally, making CROs tradable assets facilitates the de-risking of intertemporal carbon markets.
The proposal resolves some of the inconsistencies in the current academic understanding of scenarios as well as foreseeable failures in climate policy over the long term. Instead of burdening future generations with excessive debt, CROs imply a more equitable distribution of financial flows and costs over time.
Should CROs be rolled out rapidly, the interest on carbon debt would incentivize large-scale near-term CO2 removal on top of conventional emission reductions. This would help to minimize carbon debt and its associated risks, and consequently facilitate a more rapid path to net-zero than scheduled by most countries.