Two reports new argue policy measures are needed to establish a market for greenhouse gas removals and drive rewilding across the UK
Companies should be able to bid for government contracts to suck carbon emissions from the air, according to a new study from the London School of Economics that considers the most cost-effective routes to delivering a net zero emissions goal by 2050.
According to the study, released today by the LSE's Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy, creating a market for 'negative emissions' - where technologies or natural projects are used to remove greenhouse gases from the atmosphere - would drive investment in crucial new approaches.
Carbon removal technologies such as biomass energy with carbon capture and storage (BECCS) are widely seen as vital for delivering a net zero emissions goal by 2050, as some industries - such as aviation - are unlikely to be able to operate with zero emissions by mid-century. The scenarios mapped out by the Committee on Climate Change (CCC) in its recent report on the feasibility of meeting a net zero emission target leaned heavily on negative emissions approaching, recommending a massive programme of reforestation and peat moorland restoration and calling for more investment in nascent negative emissions technologies.
But currently negative emissions technologies are at an extremely early stage and there is little incentive for companies to invest in bringing projects to market. Developing a public procurement scheme or market for ways to offset emissions would help drive much-needed investment, argued report co-author Professor Sam Fankhauser.
"The technology to remove greenhouse gas emissions is becoming increasingly feasible but the UK government must act to make it more attractive to invest in carbon capture and ways to offset emissions," he said. "Setting up a government-run system, or a regulated market for negative emissions, would provide the right encouragement for the necessary research and development."
The CCC's remit is to chart a least-cost pathway to decarbonisation for the UK economy, and its latest report contains a detailed roadmap for the policies and technologies - including carbon removal - required to deliver net zero emissions by 2050.
The LSE paper stresses that in order to minimize the cost of decarbonisation, emissions must first be curbed as far as possible before negative emissions strategies are deployed.
But the report argues that hiking up carbon prices in certain key sectors, such as aviation, vehicles, and agriculture, could drive emissions reductions and efficiency gains in the short to medium term, while also generating revenue to help fund negative emissions approached elsewhere. Under such a scenario, the providers of negative emission technology would bid for government contracts through an auction process that would determine the cheapest and most effective investments, the report suggests.
The price paid for carbon would differ from sector-to-sector, according to the report. Energy intensive industries such as cement and steel, and aviation, should pay £50 per tonne initially, rising to £160 per tonne by 2050. In contrast, agriculture should face a tax of £40 per tonne to start off with, rising to £100 per tonne by 2050, the researchers say.
The proposal would raise the cost of beef by £1.41 per kg by 2050, and lamb by 70 pence per kilo, they calculate. Under the proposed carbon taxation system other carbon-intensive elements of life would also get more expensive: fuel duty would go up by 14 pence per litre in 2050, while the cost of a return flight from London to New York would be on average 6.5 per cent more expensive.
The plan would also likely face opposition from parts of heavy industry, where carbon prices have repeatedly been accused of undermining competitiveness, despite government schemes to provide financial assistance to carbon intensive companies.
Fankhauser admitted the proposals would present the government with some "tough choices". "The carbon price must achieve a balance between costs that are passed on to the consumer and taxpayer in the short term and incentives for industry to invest in ways to reduce their emissions," he said.
He added that the hike in taxes should be accompanied by targeted policies to reduce emissions and help the worst-off households, such as more funding for energy efficiency measures in fuel poor homes. This would help shield poorer members of society from the costs of decarbonisation, he argued.
However, despite the fiscal and political challenges there is a growing awareness that meeting a net zero goal becomes close to impossible without rapid progress in the development of negative emissions approaches. Separately, this week campaign group Rewilding Britain published a report suggesting a quarter of the UK's land could be returned to nature, arguing such a move could soak up carbon emissions equivalent to 10 per cent of the UK's output.
The report argues that diverting £1.9bn of the £3bn a year of farming subsidies currently awarded could underpin widespread rewilding without impacting farmers incomes.
Farming unions have broadly welcomed both the recent net zero report and the government's plans to introduce new subsidies for ecosystem services, but they have also warned that such approaches should not seek to undermine food production.
The Rewilding Britain report argues that restoring hiuge swathes of the UK could be done without impacting overall food production given the preponderance of low grade agricultural land and unforested upland areas. The report notes that there are 1.8 million hectares of deer stalking estates and 1.3 million hectares of grouse moor estates currently in the UK.
If the UK is to achieve net zero emissions both natural and industrial negative emissions solutions are likely to be needed at scale within the next two to three decades. The concept will undeniably face some fierce political opposition, but if the government is serious about making the UK a world-leading net zero emission economy new incentives for soaking up emissions are likely to be essential.
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