On the Governance of Carbon Dioxide Removal - A Public Economics Perspective

Ottmar Edenhofer, Max Franks, Matthias Kalkuhl and Artur Runge-Metzger

FinanzArchiv: Public Finance Analysis, 2024, vol. 80, issue 1, 70-110

Abstract: Climate policy increasingly requires carbon dioxide removal (CDR). We describe its role, characterize optimal flows for non-permanent removals and describe optimal pricing regimes under different information and liability conditions. Non-permanent removal - though to a certain extent optimal - creates liabilities that warrant careful risk management. Thus, seemingly cheap land-based technologies can become expensive. We discuss possibilities for integrating CDR in the EU policy architecture and define four tasks: managing the emission cap; R&D support; quality certification of removals; management of liabilities from non-permanent CDR. We propose three institutions for these tasks: a European Carbon Central Bank, a Carbon Removal Certification Authority and a Green Leap Innovation Authority.

Keywords: personal in cometax; distributional tax analysis; data matching; carbon dioxide removal; EU-ETS; social cost of carbon; climate policy; impermanence (search for similar items in EconPapers)
JEL-codes: C81 D31 D61 H23 H24 Q54 Q58 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1628/fa-2023-0012

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