Alternative carbon price trajectories can avoid excessive carbon removal

Abstract

The large majority of climate change mitigation scenarios that hold warming below 2 °C show high deployment of carbon dioxide removal (CDR), resulting in a peak-and-decline behavior in global temperature. This is driven by the assumption of an exponentially increasing carbon price trajectory which is perceived to be economically optimal for meeting a carbon budget. However, this optimality relies on the assumption that a finite carbon budget associated with a temperature target is filled up steadily over time. The availability of net carbon removals invalidates this assumption and therefore a different carbon price trajectory should be chosen. We show how the optimal carbon price path for remaining well below 2 °C limits CDR demand and analyze requirements for constructing alternatives, which may be easier to implement in reality. We show that warming can be held at well below 2 °C at much lower long-term economic effort and lower CDR deployment and therefore lower risks if carbon prices are high enough in the beginning to ensure target compliance, but increase at a lower rate after carbon neutrality has been reached.

Description
Keywords
carbon, carbon dioxide, carbon budget, carbon dioxide, climate change
Citation
Strefler, J., Kriegler, E., Bauer, N., Luderer, G., Pietzcker, R. C., Giannousakis, A., & Edenhofer, O. (2021). Alternative carbon price trajectories can avoid excessive carbon removal. 12. https://doi.org//10.1038/s41467-021-22211-2
License
CC BY 4.0 Unported