Separating CO2 emission from removal targets comes with limited cost impacts

Abstract

Net-zero commitments have become the central focal point for countries to communicate long-term climate targets. However, to this point it is not clear to what extent conventional emissions reductions and carbon dioxide removal (CDR) will contribute to net-zero. An integrated market for emissions and removals with a uniform carbon price delivers the economically efficient contribution of CDR to net-zero, yet it might not fully internalise sustainability risks of CDR and hence could lead to its overuse. In this study, we explore the implications of separating targets for emission reductions and CDR for global net-zero emissions pathways with the Integrated Assessment Model REMIND. Even though it entails a deviation from the solution of the integrated market, we find that efficiency losses are moderate. Limiting CDR lowers the financial burden for public finance, limits reliance on geologic CO₂ storage and leads to lower cumulative emissions, yet this increase in ambition comes at higher total mitigation costs.