Sustainable financing of permanent CO2 disposal through a Carbon Takeback Obligation

Abstract:

Unless there is immediate, unprecedented, reduction in global demand for carbon-intensive energy and products, then capture and permanent storage of billions of tonnes of carbon dioxide (CO₂) annually will be needed before mid-century to meet Paris Agreement goals. Yet competition from cheaper, temporary, carbon storage means that permanent disposal remains starved of investment, currently representing about 0.1% of Energy and Industrial Process (EIP) emissions. This stored fraction must reach 100% to stop EIPs causing global warming. Here we show that a cost-effective transition can occur by mandating an increasing stored fraction through a progressive Carbon Takeback Obligation (CTO) on fossil fuel producers and importers. We compare projected costs of storage to that of conventional pricing of carbon dioxide emissions, and show a CTO is competitive and often lower in cost for conventional 1.5°C scenarios over the 21^st century. A CTO provides clear policy with the aim of providing a backstop against dangerous levels of climate change, regardless of the mid-century reliance on carbon-intensive products. A number of emissions pathways exploring a range of reliance on a CTO are discussed, with CTO combined with measures to reduce absolute CO₂ production expected to deliver the lowest-risk pathway to achieving net zero.