Carbon Dioxide Removal (CDR) technologies, including Bioenergy with Carbon Capture and Storage (BECCS), have evolved from being met with skepticism to being recognized as essential for achieving net-zero emissions targets globally (IPCC, 2022). Integrated Assessment Models (IAM) have incorporated BECCS since the late 2000s (van Vuuren et al., 2013), and mitigation pathways compatible with the Paris Agreement objectives are increasingly relying on BECCS.

In that context, the rationales for considering CDR in public policy are multifaceted: balancing residual emissions from hard-to-decarbonize sectors, enabling net-zero emissions targets, and even moral obligations for historical emitters to drive down CDR costs for others (Honegger et al., 2021). However, despite its critical role, CDR is characterized by a public goods dilemma, where few actors bear the costs, but the benefits are global, necessitating systematic long-term public intervention.

This paper provides a comprehensive overview of existing and proposed economic incentives aimed at fostering the deployment of BECCS to meet national Net-Zero objectives. We examine a range of mechanisms, including carbon crediting mechanisms (Schenuit et al., 2023), voluntary carbon markets (Fuss et al., 2024), UNFCCC carbon markets (UNFCCC, 2021), taxes, and Emissions Trading Systems (ETS) (Kalkuhl et al., 2022; Rickels et al., 2022, 2021), to understand how they can be designed and implemented to promote the uptake of BECCS.

By synthesizing the current state of knowledge in the economics literature, this study aims to inform policymakers and stakeholders on the most effective strategies to overcome the economic barriers to CDR deployment, ultimately supporting the transition to a net-zero economy.

References

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