Carbon removal technology is still in its nascency, with much work and money required before greenhouse gases can be taken from the atmosphere. But it is critical if Paris Agreement targets in 2050 are to be met. Two studies published overnight have highlighted the need for widescale investment in carbon removal, also referred to as negative emissions, and suggested where the price tag ought to land.
A report from the Swiss Re Institute, a reinsurance institute, has examined carbon removal over the next three decades, and the insurance industry’s capacity to support scale-up of the technology.
The report has found that by 2050, 10 billion tonnes of CO2 will need to be removed from the atmosphere each year, meaning that carbon removal capacity will need to grow by 60% each year over the next three decades.
“Carbon removal will need to evolve into a multi-trillion-dollar industry akin to the value of the oil and gas industry today if we are to hit the climate targets set out by the 2015 Paris Agreement,” says Christoph Nabholz, chief research officer at the Swiss Re Institute.
“Serious investment in this nascent industry must start now. Failing to tackle climate change could result in global GDP loss of 18%, which we showed earlier this year. No action is not an option.”
The report also highlights that the least costly way is increasing carbon sequestration in forests, wetlands, oceans and soil, although technological solutions like filtration of carbon and underground storage are also of interest.
The report points out that the insurance industry may be well-placed to manage some of these costs and payments, with its experience in risk assessments and costings.
A second study, published in Nature, has proposed that the cost of carbon removal be shouldered by companies that emitted it in the first place.
The researchers, who are based in Austria, the UK and Russia, propose a model that makes CO2 emitters financially responsible for CO2 removal, by creating Carbon Removal Obligations (CROs). This includes treating carbon debt like financial debt, with interest payments to incentivise earlier payment.
The authors highlight that if emissions continue on their current trajectory, by 2030 there will be too much CO2 in the atmosphere to meet the Paris targets. Aggressive carbon reduction and removal strategies are required to address this, which the authors suggest would be best done by emitters with very clear financial incentives and consequences.
Read more:
- The climate crisis Australia our children could inherit
- Climate science on trial
- A machine to scrub CO₂ from the air