EU should subsidise CO2 removal, establish carbon central bank – researchers
Clean Energy Wire
The European Union should set up a carbon central bank as part of a proper regulatory structure to effectively remove large amounts of CO2 from the atmosphere to help reach global climate targets, researchers from the Potsdam Institute for Climate Impact Research (PIK) and other institutions said in a report. In addition to emissions reduction governed largely by the EU emissions trading systems (EU ETS I & II), removing carbon from the atmosphere and storing it is increasingly becoming the second key element of climate action and should be subsidised, they wrote in the report published in the journal FinanzArchiv. The price for removing and permanently storing one tonne of CO2 should be equal to the price for emitting one tonne of CO2 into the atmosphere. However, initially only removals with permanent storage should be subsidised, which would exclude afforestation or carbon storage in farmland, also because emissions in the land and agricultural sectors are not yet priced. The researchers propose to eventually change this through the introduction of an EU ETS III for the land-use sector.
The European Union has begun to look beyond pure CO2 reduction to tackle the large share of hard-to-abate greenhouse gas emissions. Getting to a net zero economy means the EU will have to capture emissions from certain industrial processes, store them underground and tackle residual emissions in livestock farming by removing an equivalent amount from the atmosphere. The European Commission presented first proposals in its EU industrial carbon management strategy earlier this year.
The report said that a European carbon central bank would issue emission allowances to cover residual emissions and hold auctions for carbon removal certificates – as long as removals are not (yet) integrated into the existing emissions trading schemes. In addition, the authors proposed to establish a 'carbon removal certification authority' and a 'green leap innovation authority', the latter in charge of financial support and technology promotion. "Carbon removal as the second pillar of climate protection will cost us a lot of money in the second half of the century – estimates range from 0.3 to 3 percent of global economic output," said PIK director Ottmar Edenhofer.
