(Bloomberg) — To achieve a net-zero carbon goal, where greenhouse gas emissions and removals are balanced, governments and companies must do two things: reduce emissions as much as possible and remove all residual pollution from the atmosphere.

To estimate how quickly emissions need to be reduced, analysts often use what is known as the carbon budget, a well-established framework for calculating the amount of greenhouse gases that can be emitted to maintain or stay below a certain level of global warming. (World leaders have committed to limiting the rise in the global average temperature to well below 2 degrees Celsius above pre-industrial levels, and ideally to 1.5 degrees Celsius.)

However, quantifying the amount of carbon dioxide available to meet such temperature targets is a less well-researched analytical area, so researchers at the University of Oxford have just developed a “carbon dioxide removal budget” to address this problem.

Think of carbon removal as the “net” in net zero. CO2 can be removed in many ways, including through nature-based approaches such as restoring forests or peatland. There are also technologies such as direct air capture and storage, so-called biochar and bioenergy, and carbon capture and storage (BECCS).

But much of this technology has not yet reached its full potential – and time is running out. The planet is warming so fast that without rapid and drastic action, the critical 1.5 degree threshold will almost certainly be exceeded. Therefore, it is essential to develop technologies and projects that can save billions of tons of planet-warming gases to reduce global temperatures.

Oxford academics Ben Caldecott and Injy Johnstone, who authored the paper, argue that while growth of this industry is essential if we are to have any chance of achieving the carbon neutrality goal, carbon removal will always remain “a fundamentally finite resource” that must be distributed responsibly.

“Carbon removal is not free and has significant economic constraints,” Caldecott said in an interview. “So if a company that could easily reduce emissions instead chooses to use part of its available budget for carbon removal, what does that mean for other actors? This finite resource must be distributed fairly, and there will undoubtedly be trade-offs.”

Put another way, industries that can more easily reduce their emissions should maximize those efforts, leaving more of the world’s limited capacity to remove carbon from the atmosphere to those that are naturally limited in their ability to do so. Companies in so-called “hard-to-reduce” industries, such as steel producers and airlines, may have a greater need for such removals under certain circumstances, the authors say.

The capacity for carbon removal and storage is generally limited by physical factors as well as a range of economic, institutional and technological barriers. Caldecott and Johnstone therefore said that important questions remain: “who has the right to access carbon removal that is already feasible and who has the responsibility to unlock further potential.”

So how much carbon do we need to remove from the atmosphere and at what cost to meet our climate goals? And what is possible given the current state of carbon removal technology?

Assuming a minimum price of US$100 per tonne of CO2 removal and taking into account what is actually feasible from a technical and economic perspective (not to mention political variables), the authors estimate that in a scenario in which global warming is limited to about 1.5 degrees Celsius, there will be a global CO2 removal deficit of 49 gigatons of CO2 between 2025 and 2100.

A deficit means that the demand for carbon removal will exceed the projected use of such technologies.

If humanity were to accept a warming of two degrees Celsius – which would have catastrophic consequences from a climate change perspective – there would be potential for a small surplus of 12 gigatons of CO2 in terms of the carbon removal budget.

Nature does not have an unlimited capacity to store carbon. And all natural carbon sinks could eventually release some of the stored CO2 back into the atmosphere. Novel carbon removal techniques such as direct air capture, in which machines suck CO2 out of the atmosphere and bury it deep underground, have a lower risk of reversal. However, these techniques also come with costs of up to $1,610 per ton for the most complex. And it can take a long time to build the necessary infrastructure.

“CO2 removal is like the new gold,” Johnstone said. “It is extremely valuable, scarce and should be reserved for only a select number of use cases.”

Robert Höglund, an expert on carbon removal, takes a different view. He says the main constraint on the amount of removal is “not the finite resources – but the willingness to pay.”

He agrees with Caldecott and Johnstone that while removal needs to be scaled, the top priority of companies and governments seeking to remove carbon should be to cut emissions. “We should plan as if carbon removal is scarce, but build so that it is abundant,” he said.

“There are huge uncertainties about our ability to remove CO2 and the focus should be on maintaining the original carbon budget,” Johnstone said. “Any discussion about carbon removal must start with the fact that it is much easier to reduce emissions than to pull them back out of the atmosphere.”

Sustainable finance at a glance

Another Wall Street giant appears to be giving in to the far-right’s crusade against ESG on behalf of the oil industry and others. The asset management unit of Goldman Sachs Group Inc. has withdrawn from the world’s largest climate alliance for investors, the latest move in a series of similar departures amid ongoing Republican attacks on green finance. The exit joins a broader trend as financial firms grow increasingly fearful of opponents of environmental, social and governance-focused investment strategies.

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