Mutual reinforcement of land-based carbon dioxide removal and international emissions trading in deep decarbonization scenarios

Abstract

Carbon dioxide removal (CDR) technologies and international emissions trading are both widely represented in climate change mitigation scenarios, but the interplay among them has not been closely examined. By systematically varying key policy and technology assumptions in a global energy-economic model, we find that CDR and international emissions trading are mutually reinforcing in deep decarbonization scenarios. This occurs because CDR potential is not evenly distributed geographically, allowing trade to unlock this potential, and because trading in a net-zero emissions world requires negative emissions, allowing CDR to enable trade. Since carbon prices change in the opposite direction as the quantity of permits traded and CDR deployed, we find that the total amount spent on emissions trading and the revenue received by CDR producers do not vary strongly with constraints on emissions trading or CDR. However, spending is more efficient and GDP is higher when both CDR and trading are available.