Frostbyte is helping clients source high integrity carbon offset credits that allow for removal and permanent sequestration. This practice recognizes the shift in stakeholder expectations around the corporate use of voluntary offset credits to meet emissions reduction goals. It's a paradigm shift in the world of voluntary carbon offsetting that is supported by the advocacy work of a new organization called Carbon Takeback.
The organization has developed a Carbon Takeback policy that seeks to prevent fossil fuels from causing global warming. The idea is pretty straight forward: We still need to use some fossil fuels as the world decarbonizes, but every tonne of carbon dioxide that is emitted from burning fossil fuels needs to be balanced by permanently storing a tonne of carbon dioxide.
Based on this concept, there is a call for a new carbon trading mechanism called a Carbon Takeback Obligation (CTBO) to incentivize the growth of the carbon dioxide storage industry. Proponents of the CBTO propose that fossil fuel producers be on the hook to store a percentage of the CO2 generated by the products that they sell. That percentage would grow over time, from 10% in 2030 to 100% in 2050. This is a form of extended producer responsibility in which producers are accountable for the treatment or disposal of post-consumer products. In this case, the post-consumer product is the carbon dioxide that exists in the atmosphere after you drive your car or take a flight. This would be similar to the environmental levy some consumers already pay when they purchase a set of tires for their car or buy a new television.
A CTBO would result in an increased cost for fossil fuel products as the environmental externality is internalized in the price of the product. The rational outcome for consumers would then be to seek lower cost alternatives to fossil fuels. This would make electric vehicles lower cost than gasoline or diesel-powered vehicles. It would make electrical home heating (using zero emission electricity) more attractive. It would force industrial users of fossil fuel energy to invest in carbon capture or fuel switching to minimize their costs. In sum, the CBTO would be an accelerator towards a net-zero future. The remaining fossil fuel combustion that cannot be mitigated at a reasonable cost (e.g., airlines might be an example of one of these hard-to-abate sectors) would have to purchase a CBTO to ensure that net emissions to the atmosphere is zero.
The CBTO brings to light two important issues:
- carbon accounting in a net zero world; and
- geospheric, biospheric, and atmospheric carbon stocks are not all the same.
First, let’s talk about the carbon accounting issues. There are two forms of offset credits: those that remove carbon dioxide from the atmosphere and those that avoid the release of carbon dioxide to the atmosphere. You can read more about the difference here. These carbon offsets, act as a form of emissions permit. If I buy a carbon offset credit, I can apply this against my emissions in order to make a carbon reduction claim. In a world where emission reductions need to be reduced slowly over time, it is defendable to use avoidance-based offset credits towards this carbon reduction claim. The purchase of that avoided carbon emission allows me to emit. Atmospheric carbon is still increasing, but because low and no-carbon activities are being financed, these activities will eventually (at some point in the future) become the norm. Unfortunately, we do not live in a world where we have the luxury of reducing emissions slowly over time.
We must reduce emissions rapidly and get to global net zero no later than 2050 to prevent global temperature increase that exceeds 1.5 degrees Celius. In this world, a zero-emissions baseline case is the business-as-usual activity. Activities cannot earn a credit for simply avoiding emissions. Everybody should already be avoiding emissions. In this world, avoidance-based GHG crediting, which has been around since the Kyoto Protocol, does not hold up. The only valid form of offset credit in a net-zero world is to remove carbon directly from the atmosphere. Since an offset credit is a permit to emit, this means that I must have one carbon removal for every tonne of carbon dioxide that I emit.
A second important issue that the CBTO highlights is the idea of balancing carbon stocks and taking into account whether those stocks are geological, biological, or atmospheric. The CTBO advocates for a “like for like” principle whereby geological carbon (i.e., the type that is emitted when fossil fuels are combusted) must be returned to the geosphere either by geological storage or mineralization. Most of the carbon removals that exist today increase biological carbon stocks through sequestration in natural systems. There are two major problems with this approach. First, we cannot continue to sequester anthropogenetic carbon dioxide in the biosphere indefinitely. While it is likely the case that biological carbon stocks are below their natural pre-industrial, pre-agricultural state, there are limits to how much carbon can be absorbed in the biosphere. We should also note that accounting for natural carbon sequestration is tricky. If trees are planted in one place it may take useful land out of service. For example, if I plant trees on agricultural land, it may simply result in the displacement of that agricultural activity and the clearing of land somewhere else. The climate benefits of tree planting can be largely illusory. This is known as the forest leakage problem. The second major problem with relying on biological carbon to remove and sequester anthropogenetic carbon dioxide is that permanence cannot be guaranteed. Biological carbon reversals occur all the time. Just ask California’s forest carbon offset developers. What’s more, as we grow biological carbon stocks it becomes more likely that a reversal occurs. It is wrong to assume that sequestering carbon in the biosphere is equivalent to releasing geological carbon to the atmosphere. The biological and geological carbon cycle are operating on completely different time-scales. Decades vs. Millenia. In order for a carbon removal to be credible, a “like for like” principle is needed.
The figure below highlights how carbon moves between the geological, biological and atmospheric stocks. The figure also introduces the concept of a fourth carbon stock known as “human structures”. This would include carbon dioxide bound up in things like lumber – not a release to atmosphere, but not exactly a permanent removal either. At best, carbon dioxide that is bound up in human structures is only sequestered for a few hundred years. Most of the carbon dioxide that is sequestered in human structures is likely to remain in place for less than 100 years. As such, we cannot count on human structures to serve as permanent carbon sinks that will help to address long-term global climate change.
Figure 1 – The impact of human activities on carbon stocks and flows (source: Carbon Takeback Obligation, A Producers Responsibility Scheme on the Way to a Climate Neutral Energy System)
The CBTO would track not just carbon flows into and out of the atmosphere, but across all four carbon stocks. A biological carbon storage unit (b-CSU) would be issued for short-term carbon storage in the biosphere. The b-CSU would then only be permitted to offset releases from the biosphere (e.g., clearing forested lands for agriculture). A geological carbon storage unit (g-CSU) would be issued for long-term carbon storage in the geosphere and could be used to offset releases of carbon from the geosphere such as the combustion of coal, oil, or natural gas. Human structures are effectively an intermediary storage before the eventual release to atmosphere and would not earn a carbon storage unit.
There are loads of policy questions that would need to be sorted out if a CTBO system were to ever be implemented as regulation. Who would be the obligated party? What are the allowable carbon removal technologies? How is short and long-term storage monitored? But the idea of a CTBO is not contingent on regulation. Forward-thinking corporations are already realizing that carbon removals are the only rational form of carbon offset in a net-zero world. Those corporations that are really ahead of the curve are recognizing that removals must be permanent on a geological timescale. This is the central premise of the carbon takeback concept and is consistent with Frostbyte’s exclusive focus on permanent atmospheric removals. We can’t flip the switch and have 100% carbon takeback tomorrow, but we can build toward that future in the years ahead.
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