Journal Article
From Gross to Net: Carbon Dioxide Removal in an Analytic Climate Economy
Carbon dioxide removal (CDR) is considered essential for climate change mitigation. Yet its optimal role in climate policy remains unclear under non-permanent storage, energy constraints, and fossil fuel scarcity. We integrate CDR into an analytic integrated assessment model to derive general conditions for socially optimal CDR deployment. Within a linear carbon cycle model, we consider different CDR pathways, including ocean-based CDR methods. Introducing CDR leaves the optimal carbon price largely unchanged and therefore implies limited crowding out of emission reductions. CDR affects gross emissions through its energy requirements. As a result, its deployment is constrained by the carbon intensity of energy supply and depends on fossil fuel scarcity and the development of renewables. With CDR, overshoot policies become optimal, and under high damages, temperatures peak well before 2100.
