Accounting, Rewarding, and the Paris Agreement
In a newly published article in Climate Policy, I explore some governance issues associated with negative emission technologies, taking bioenergy combined with carbon capture and storage (BECCS) as the case at hand.
The article covers three main topics:
- Accounting for negative emissions;
- Rewarding negative emissions (and incentives for industry to engage); and
- Aligning with carbon dioxide (CO2) emissions trading and modalities of the Paris Agreement.
Studies have shown that the ‘well below 2 °C’ target from the Paris Agreement will be hard to meet without large negative emissions contributions from mid-century onwards. This would entail removing CO2 from the atmosphere and storing the gas in biomass, soil, suitable geological formations, deep ocean sediments, or chemically-binding it to certain minerals. So far, biomass energy combined with BECCS is the negative emission technology that has been given the most attention.
One issue that deserves further attention is the value of negative CO2 emissions compared to avoided emissions. Let us take the case of Carbon Capture and Storage (CCS) applied to power plants, one coal-based and one biomass-based. The difference in terms of climate performance (i.e. CO2 emissions) depends on the production and processing required of coal versus biomass, and on avoided emissions in the case of coal compared to negative emissions in the case of biomass. Producing, transporting and processing biomass for energy implies a number of efficiency losses and some of these losses may be larger for biomass than for coal.
Furthermore, we know that the net effect of removing one ton of CO2 is actually less than one ton due to a rebound effect through the global carbon cycle. This rebound effect is an argument for discounting negative emissions, meaning that only e.g. 0.8 ton carbon dioxide for each ton removed from the atmosphere is approved. However, I also argue that one ton of negative emissions should receive an additional value (credit) equal to avoided CO2 emissions, to secure an overall cost-effective emission mitigation system. The permit price in an emissions trading system is a straightforward value of avoided carbon dioxide emissions. Adding the efficiency losses of biomass energy, however, could lead to a higher cost per ton of negative CO2 emissions than avoided CO2 emissions, implying that CCS could become commercial before BECCS (and other negative emission technologies).
In all cases, industry interest appeared dependent on a sufficiently high carbon price. So why would anyone invest in negative emissions? The answer for BECCS is that if investing in negative emissions could earn an extra price compared to avoided emissions, which could be driven by the need to reduce the atmospheric concentration of CO2 in a situation where only avoiding emissions is not sufficient. ‘Overshoot’ could be such a situation, where atmospheric concentration is above the level corresponding to the two-degree target. Alternatively, a steep increase in the negative impacts of climate change could warrant tougher efforts to reduce the CO2 concentration of the atmosphere.
Since negative emissions will likely be needed in addition to other extensive efforts to avoid CO2 emissions, and since further development and diffusion of negative emission technologies will take time, the question remains around when and how an additional price on negative emissions should be introduced.
About the Author
Asbjørn Torvanger is Senior Researcher at CICERO Center for International Climate Research.