Five principles for robust carbon dioxide removal policy in the G7

Commentary Five principles for robust carbon dioxide removal policy in the G7 Felix Schenuit, 1, *Oliver Geden, 1 and Glen P. Peters 2 1 German Institute for International and Security Affairs, Berlin, Germany 2 CICERO Center for International Climate Research, Oslo, Norway *Correspondence: felix.schen[email protected] https://doi.org/10.1016/j.oneear.2024.08.015 Carbon dioxide removal (CDR) policy is evolving rapidly but remains fragmented. Upcoming initiatives by the G7 members, which face expectations to be frontrunners in CDR deployment, should follow five principles for robust policies. This will be critical to prepare for distributional conflicts associated with achieving net-zero and net-negative emissions, both domestically and internationally. Carbon dioxide removal (CDR) is one pivotal component for the achievement of net-zero carbon dioxide and greenhouse gas (GHG) emission targets. 1 To achieve the long-term temperature goal of the Paris Agreement, mitigation scenarios assessed by the IPCC show upscaling of both conventional CDR methods that are already being deployed on a large scale in the land use, land use change, and forestry (LULUCF) sector and novel CDR methods that are still at a lower technology readiness level (e.g., direct air carbon capture and storage, DACCS). Alongside rapidly reducing emissions, integrated assessment modeling estimates that global CDR deployment needs to increase from today’s 2 GtCO 2 to 7–9 GtCO 2 per year in 2050. 2 How can the Group of Seven (G7), which takes a high share of historical emissions, lead the way? The politics of CDR and the role of G7 CDR is not new to climate policy and politics: whether and how to use removals in the LULUCF sector to achieve near-term mitigation goals has long been a contentious issue in international negotiations and domestic mitigation target and policy designs. Many countries were once resistant to using LULUCF removals for offsetting GHG emissions during the Kyoto Protocol period because of the risk of weakening efforts to reduce gross emissions. 3 However, the diffusion of netzero targets following the 2018 IPCC Special Report on Global Warming of 1.5C has not only caused new momentum for CDR as part of short term mitigation targets; it also added a new layer to the politics of CDR, highlighting different strategic roles CDR will play in the future. Removals are now recognized as critical to counterbalance residual emissions to achieve net-zero targets and to realize net-negative emissions thereafter. As with emissions reductions, the level of ambition of CDR deployment raises politically contentious issues of burden sharing and equity across countries and regions. 4,5 Emerging economies such as Brazil, China, India, and South Africa are increasingly articulating expectations of developed countries with a high share of historical emissions to achieve net-zero and net-negative GHG emissions before 2050, arguing that this would provide them with more ‘‘carbon space’’ 6,7 for their future development. These distributive conflicts and diplomatic tensions around residual emissions and CDR deployment will only become more explicit as the 1.5C global warming level is approached, making new forms of international cooperation an important aspect of emerging CDR policy initiatives. The G7 ‘‘leading industrial democracies’’ (i.e., Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, as well as the European Union as a non-enumerated member) can be a key forum for pioneering new cooperation on CDR for at least three reasons. First, this group stands out with a high cumulative share of (fossil) CO 2 emissions since 1850 (Figure 1) and therefore faces expectations to spearhead both the facilitation of technological breakthroughs and the deployment of CDR on a large scale. Second, as an informal, plurilateral group, the G7 has demonstrated its efforts to shape climate policy agendas (e.g., Clean Energy Economy Action Plan from 2023), prepare multilateral negotiations (e.g., in the run-up to the Paris Agreement negotiations), and induce new cooperation in instances where its members have succeeded in aligning their positions (e.g., the Climate Club launched in 2022). Third, several G7 members have recently adopted innovative CDR policies and positioned themselves as policy entrepreneurs by developing new deployment incentives or removal targets, creating fertile ground for new cooperation on CDR. The G7 is therefore well placed to take decisive steps to close the large ‘‘CDR gap’’ between the amount of CDR needed and currently very limited deployment and pledges. 2 Leadership on this issue would not only help to mitigate the abovementioned tensions related to the burden sharing dimension of the different timing of net-zero and net-negative around the world, but would also help to create synergies in the currently fragmented CDR policy space. The rapidly evolving but fragmented CDR policy space The CDR policy space has evolved significantly in recent years. The US in particular has recently played a pivotal role in initiating CDR policy. The 2022 Inflation Reduction Act and the 2021 Bipartisan Infrastructure Law include, among other CDR-related initiatives, the expansion of the results-based tax credit 45Q, now providing a subsidy of USD 180 per tonne of CO 2 captured directly from the atmosphere. Furthermore, the Regional Direct ll One Earth 7, September 20, 2024 ª2024 Elsevier Inc. 1487 All rights are reserved, including those for text and data mining, AI training, and similar technologies. Air Capture Hub program backed with USD 3.5 billion has been established to fund demonstration and deployment of DAC in four regional clusters with the potential for 1 Mt of annual CO 2 capture capacity. In addition, the CDR Purchase Pilot Prize established by the US Department of Energy in 2024 kicks off a CDR purchasing scheme worth USD 35 million. Public procurement has also been addressed in a new policy initiative in Canada, where the government has integrated CDR into its Low-carbon Fuel Procurement Program in 2024. In the EU and the UK, where emissions trading systems are central climate policy instruments, planning processes on ways to potentially integrate CDR have already begun. Specific designs and many practical issues remain open, but linking CDR to carbon pricing has the potential to create an incentive structure that is less dependent on public subsidies in the future. In addition to an integration into existing climate policy instruments, both the EU and the UK are developing policies for the monitoring, reporting, and verification (MRV) or the certification of CDR, e.g., the EU’s Carbon Removal and Carbon Farming (CRCF) Regulation. In addition, various schemes have been established to support research, development, and deployment of CDR, such as the EU Innovation Fund, which co-finances CDR (-related) projects such as Stockholm Exergi’s BECCS project. The UK and some EU member states have started experimenting with national CDR policies, including reverse auctioning schemes and public procurement to enable costeffective and government-endorsed scaling-up of CDR. Overall, the CDR policy landscape exhibits considerable fragmentation (Figure 2). 9 For one thing, emerging CDR policies are often part of broader strategies that include other mitigation options under umbrella terms such as ‘‘carbon management’’ and ‘‘carbon farming.’’ For example, the EU CRCF applies to practices that enhance carbon sequestration and storage in forests and soils, as well as to those that reduce greenhouse gas emissions from soils. In the US, initiatives such as the Carbon Management Challenge highlight that CDR is regularly subsumed under carbon management, which also includes fossil carbon capture utilization or storage (CCU/S). For another thing, countries choose very different approaches and policy mixes to regulate and incentivize CDR. For example, in the US, CDR policies (e.g., deployment incentives) are established without direct links to residual emissions ranges. Germany, on the other hand, has established a process for setting legally binding targets but lacks initiatives to provide incentives for deployment. Given the long-term and evolving role of CDR in mitigation pathways, the G7 members should aim for robust policy designs from the outset and engage in the coordination of emerging CDR policy, especially to lead the race to net-negative emissions. As an informal forum for international cooperation, the G7 format has huge potential in this regard. Five principles for robust CDR policy Robustness of public policies is usually understood as the ability of a particular policy to adapt and innovate in response to political tensions that institutions or policies face. 10 In this sense, aiming for a robust CDR policy does not mean establishing a policy instrument that is immune to changes over time, but rather an arrangement that can change in design while keeping the definition of the policy problem and the intended function stable. 11 To achieve this kind of robustness, new G7 CDR initiatives should incorporate the following five principles (see Table 1 for an overview). First, the implementation of credible monitoring,reporting, and verification (MRV) is a prerequisite for robust CDR policy. Only once this initial step has been achieved can policy instruments be strategically employed to facilitate the upscaling and regulation of CDR. Furthermore, MRV is a crucial aspect of establishing trust in the CDR sector. In order to ensure that MRV systems in themselves are robust and capable of adapting to changing political settings as well as new knowledge about existing and new CDR methods, it is necessary that they incorporate mechanisms for continuous review and A B Figure 1. Cumulative shares of historical CO 2 emissions from 1850 to 2022, showing the cumulative emissions from 1850 up to the year 2022 (A) Cumulative shares of fossil CO 2 emissions of numerated G7 members (Canada, France, Germany, Italy, Japan, UK, and US) and the rest of EU-27 compared to all other countries (gray). (B) Cumulative shares of CO 2 emissions including emissions from land use change of numerated G7 members (Canada, France, Germany, Italy, Japan, UK, and US) and the rest of EU-27 compared to all other countries (gray). Data from Global Carbon Budget, 2023. 8 Commentary 1488 One Earth 7, September 20, 2024 ll readjustments for novel CDR through regular revision clauses in national projectbased MRV or certification schemes and updates of IPCC Guidelines for National GHG Inventories. In addition, emerging MRV systems within countries should already incorporate future international cooperation and compatibility. This should be done not only with a view to the multilateral market mechanism under the Paris Agreement (Article 6.4), but also to enable biand plurilateral cooperation among smaller groups of countries. A crucial aspect of achieving international compatibility will be the IPCC’s upcoming methodology report on CDR, CCS, and CCU, currently planned for late 2027, to be adopted afterward by the UNFCCC. The G7 members should align their policy planning with this process, join forces, and coordinate to support targeted research projects and capacity building in national administrations on reporting methodologies for CDR. Second, CDR policy instruments should be embedded and gradually phased into existing policy landscapes, not only in climate policy, but also in close coordination with environmental, agricultural, and industrial policies. Actors from these sectors are likely to shape emerging CDRrelated public policy processes and their politics. For example, policies targeting CDR methods related to the LULUCF sector or with high biomass demand will need to address co-benefits for and trade-offs with biodiversity and food security. Energy-intensive methods such as DACCS will need to be aligned with renewable energy needs in industry and grid planning. This embeddedness makes CDR an issue for new forms of cooperation as well as political conflicts. As with emissions reduction policies, a sequencing approach that aims to gradually integrate CDR into existing policy landscapes can help overcome political challenges, build economic interest groups, and improve policy design over time. 12,13 Third, G7 members should explore ways of linking CDR deployment initiatives to net-zero goals. There is considerable variation in regulatory and governance models across the G7, 14 particularly with respect to long-term planning and target setting. However, the following aspect of CDR policy is essential for all G7 members, regardless of how it is actually implemented. Robust CDR policies should incorporate or lead to policy planning processes that first identify plausible ranges of residual GHG emissions at the envisaged time for achieving net-zero emissions, and secondly align CDR upscaling planning with these ranges. Identifying residual emissions is relevant to CDR policy for two reasons: first, identifying plausible ranges facilitates engagement among sectors in a discussion of their respective mitigation strategies, thereby enabling the identification of the emissions that are most difficult to reduce. These discussions represent an important starting point for initiating cross-sectoral deliberations and political struggles on the burden sharing of CDR deployment commitments. Second, by examining plausible ranges for residual emissions at the point of net-zero, an amount of minimum gross emissions reductions can be anchored in climate policy discourse and possibly in policy planning or even regulation (depending on governance research & development support environmental safeguards legally-binding removal targets compliance market integraon Carbon management (CCS/CCU/CDR) Carbon farming (reducon & removal) type of migaon opon type of migaon opon type of policy results-based incenves Example 2 US DAC Hubs MRV Example 1 EU CRC-F Example 3 German CDR targets CDR-specific type of policy Figure 2. Conceptual overview of fragmented CDR policy space The CDR policy space is fragmented along two dimensions: first, the type of policy being enacted to address CDR (x axis), including monitoring, reporting, and verification (MRV); environmental safeguards; research and development support; results-based incentives; compliance market integration; and legally binding removal targets. Second, the degree to which policy initiatives are CDR specific (y axis), ranging from CDR-specific in the middle to less specific initiatives that are part of carbon management initiatives that also include fossil carbon capture utilization or storage (CCU/S) or carbon farming (practices that either enhance carbon sequestration and storage in forest and soils or that reduce greenhouse gas emissions from soils). Examples 1–3 in red circles depict three key initiatives in G7 members. Commentary One Earth 7, September 20, 2024 1489 ll modes in countries). This would help prevent the reliance on implausible amounts of CDR and backloading emission reduction strategies toward net-zero. The identification of residual emissions does not, in and of itself, resolve the contentious issues associated with CDR. However, it does facilitate the anticipation of potential political conflicts and future alliances, thereby enhancing the robustness of CDR policies. Fourth, CDR policies designed in the G7 today should already be ‘‘net-negative ready.’’ In anticipation of a temporary temperature overshoot and the variety of challenges linked to this, 15 the G7 members, with their high share of historical emissions, will be expected to contribute net-negative CO 2 or GHG emissions to help reverse the overshoot. This demand has already been articulated by developing countries 5 and is already reflected in some climate target designs, such as those of the EU or Germany, where netnegative GHG emissions are envisioned to follow net-zero. As the timing of netzero becomes a more contentious issue, it is important that CDR policies are designed to anticipate and are capable to facilitate net-negative emissions trajectories in the long term. In light of the divergent starting points among the G7 countries, it would be beneficial to engage in joint long-term planning and coordination to advance this often overlooked aspect. Building on the already agreed language on net-zero GHG emissions by 2050, G7 governments could work toward a common net-negative GHG emissions target for 2060 and initiate discussions on the level of ambition and fair share of mitigation efforts for the second half of the century. Fifth, International cooperation on CDR research, demonstration, and deployment should be built into the emerging CDR policy landscape. 16 Given their similarities in the challenge of scaling up CDR and their responsibility to act as frontrunners, the G7 can pioneer new formats of plurilateral cooperation and coordination on CDR. Ministerial meetings or regular interactions with stakeholders through platforms for dialogue, such as Business7 and Science7, which are associated with G7 presidencies, can act as catalysts for new forms of cooperation. In view of the pivotal role of MRV in the formulation of robust CDR policy, a new G7-led initiative for targeted support of research and capacity building in national administrations would constitute a crucial input for the development of emerging CDR policy. Moreover, the G7 could kick off an alliance that issues pledges for the public procurement of CDR to establish reliable demand and targeted incentives for the emerging CDR sector. However, new formats for cooperation should not exclusively be linked to G7. The group should invite nonG7 countries to these initiatives and aim for expanding its scope to G20 in the future, e.g., by building on existing formats like Mission Innovation. In particular, it would allow for exchanges with emerging economies, which are demanding more ‘‘carbon space’’ through earlier net-zero and netnegative targets for developed countries, outside of the formal UNFCCC negotiation process. The rapid upscaling of CDR presents an additional challenge for climate policymaking. The G7 has the potential to play a pivotal role and advance robust CDR policy, given its capacity to spearhead climate policy, the frontrunner status in CDR policymaking of some of its members, and the external expectations that G7 members should lead the way on CDR upscaling. The integration of the aforementioned five principles would enable the advancement of robust CDR policies within the context of constantly evolving political Table 1. Overview of five principles for robust CDR policy Principle Recommendations I. Implement credible monitoring, reporting, and verification (MRV) dinitiate credible MRV systems aiming at building trust in the emerging CDR sector dbuild adaptable MRV systems to enable integration of emerging methods and new knowledge; coordinate capacity building for reporting practices among frontrunners II. Embed and gradually phase-in policies into existing policy landscapes ddedicated CDR policies to be embedded in wider policy landscapes, following strategic sequencing strategies dCDR policies to be intentionally designed along the lines of ‘‘experimentalist governance’’ designs III. Link deployment initiatives to net-zero goals dstart policy planning processes aiming at identifying plausible ranges of residual GHG emissions and align planning for CDR upscaling accordingly dinitiate sectorand country-specific discussions on CDR burden sharing to prepare for emerging distributive conflicts (e.g. through a common net-negative GHG emissions target for 2060) IV. Establish ‘‘net-negative ready’’ policy frameworks daim at future-proof CDR policy instruments capable of delivering net-negative CO 2 or GHG emissions in the long term dstart exchanges on policy designs, target structures, and business models, as well as implications for multilateral negotiations under the UNFCCC V. Strengthen international cooperation on research, demonstration, and deployment destablish international cooperation on CDR research, demonstration, and deployment with the G7 members as pioneers dspecific cooperative initiatives (e.g., on MRV or coordinated public procurement pledges) to be initiated by its members and opened to other interested parties Commentary 1490 One Earth 7, September 20, 2024 ll landscapes. New G7 initiatives, such as joint net-negative commitments, would not only help advance CDR policy. They would signal a cooperative attitude in the intricate politics of agreeing on fair mitigation shares for G7 members following the established principle of common but differentiated responsibilities and respective capabilities (CBDR-RC). ACKNOWLEDGMENTS F.S. and O.G. acknowledge support from the Horizon Europe Research and Innovation program project UPTAKE (grant no. 101081521). G.P.P. acknowledges support from the Horizon Europe Research and Innovation program project IAM COMPACT (grant no. 101056306). DECLARATION OF INTERESTS The authors declare no competing interests. REFERENCES 1. Babiker, M., Berndes, G., Blok, K., Cohen, B., Cowie, A., Geden, O., Ginzburg, V., Leip, A., Smith, P., Sugiyama, M., and Yamba, F. (2022). Cross-sectoral perspectives. In: IPCC, 2022: Climate Change 2022: Mitigation of Climate Change. In Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, and R. Fradera, et al., eds. (Cambridge University Press). https://doi.org/10.1017/9781009157926.005. 2. Smith, S.M., Geden, O., Gidden, M.J., Lamb, W.F., Nemet, G.F., Minx, J.C., Buck, H., Burke, J., Cox, E., Edwards, M.R., et al. (2024). The State of Carbon Dioxide Removal 2024 - 2nd Edition. https://doi.org/10.17605/ OSF.IO/F85QJ. 3. Dooley, K., and Gupta, A. (2017). Governing by expertise: the contested politics of (accounting for) land-based mitigation in a new climate agreement. Int. Environ. Agreements. 17, 483–500. https://doi.org/10.1007/s10784-0169331-z. 4. Lee, K., Fyson, C., and Schleussner, C.F. (2021). Fair distributions of carbon dioxide removal obligations and implications for effective national net-zero targets. Environ. Res. Lett. 16, 094001. 5. Mohan, A., Geden, O., Fridahl, M., Buck, H.J., and Peters, G.P. (2021). UNFCCC must confront the political economy of net-negative emissions. One Earth 4, 1348–1351. https:// doi.org/10.1016/j.oneear.2021.10.001. 6. BASIC (2024). Brazil, China, India, South Africa Ministerial Joint Statement on Climate Change, July 21 2024. https://mp.weixin.qq. com/s/Oml88PsqP02WLMp8o5aMCA. 7. Schenuit, F., Brutschin, E., Geden, O., Guo, F., Mohan, A., Oliveira Fiorini, A.C., Saluja, S., Schaeffer, R., and Riahi, K. (2024). Taking stock of carbon dioxide removal policy in emerging economies: developments in Brazil, China, and India. Clim. Pol., 1–20. https://doi. org/10.1080/14693062.2024.2353148. 8. Friedlingstein, P., O’Sullivan, M., Jones, M.W., Andrew, R.M., Bakker, D.C.E., Hauck, J., Landsch€ utzer, P., Le Que ´re ´, C., Luijkx, I.T., Peters, G.P., et al. (2023). Global Carbon Budget 2023. Earth Syst. Sci. Data 15, 5301–5369. https://doi.org/10.5194/essd-15-5301-2023. 9. Schenuit, F., Buck, H., Geden, O., Hofbauer, V., Odeh, N., Schell, K., Sugiyama, M., and Zheng, Q. (2024). Chapter 5: Policy and Governance. In The State of Carbon Dioxide Removal 2024 - 2nd Edition, S.M. Smith, et al., eds. https://doi.org/10.17605/OSF. IO/4EGUH. 10. Sørensen, E., and Ansell, C. (2023). Towards a Concept of Political Robustness. Polit. Stud. 71, 69–88. https://doi.org/10.1177/003232172 1999974. 11. Capano, G., and Woo, J.J. (2017). Resilience and robustness in policy design: a critical appraisal. Policy Sci. 50, 399–426. https:// doi.org/10.1007/s11077-016-9273-x. 12. Meckling, J., Sterner, T., and Wagner, G. (2017). Policy Sequencing toward Decarbonization. Nat. Energy 2,918–922.https://doi.org/10. 1038/s41560-017-0025-8. 13. Sabel, C., and Victor, D.G. (2022). Fixing the Climate: Strategies for an Uncertain World (Princeton: Princeton University Press). 14. Guy, J., Shears, E., and Meckling, J. (2023). National Models of Climate Governance among Major Emitters. Nat. Clim. Chang. 13, 189–195. https://doi.org/10.1038/s41558-02201589-x. 15. Reisinger, A., and Geden, O. (2023). Temporary overshoot: Origins, prospects, and a long path ahead. One Earth 6, 1631– 1637. https://doi.org/10.1016/j.oneear.2023. 11.008. 16. Nemet, G.F., Gidden, M.J., Greene, J., Roberts, C., Lamb, W.F., Minx, J.C., Smith, S.M., Geden, O., and Riahi, K. (2023). Nearterm deployment of novel carbon removal to facilitate longer-term deployment. Joule 7, 2653–2659. https://doi.org/10.1016/j.joule. 2023.11.001. Commentary One Earth 7, September 20, 2024 1491 ll