🚨 NEW PAPER: How Frontloaded ETS Revenues Can Close Europe’s CDR GAP

🤔 Can we leverage future ETS revenues for present day investments into CDR? What would that look like and what would its impact be?

📄 That is the big question Raphaël Cario cario and I are addressing with our new peer-reviewed research paper published by the American University’s Institute for Responsible Carbon Removal .

💶 The idea is not new: use European Investment Bank bonds backed by an ETS1 and ETS2 guarantee base to mobilise up to 200 billions of euros in green investment in the 2028-2034 period.

⭐ What is new is how we make this capital work for CDR.

🔎 We analyse what a moderate share (5-15% - €10-€30b) of this frontloading envelope dedicated to CDR could mean.

👉 The key takeaway is that the EU is unlikely to achieve its climate and CDR targets (2040 and 2050) unless they invest significant sums into CDR early, with frontloading looking like a promising route.

📈 A €20b investment, for example, could yield 51.4Mt of CDR by 2040 and 136.8Mt by 2050. Without frontloading, Europe is set to achieve only 18.3Mt by 2040 and 55.4Mt by 2050, coming significantly short of its own targets.

📊 We also model the cost of five and ten year delays, showing clearly the implications on cost curves, job creation, installed capacity, and climate targets for the EU.

📆 In just under two weeks we will see the long-awaited ETS revision proposal by the EU Commission. Now is the time to think beyond integration, and look at how the ETS can be leveraged for CDR more broadly.

🙏Thank you to the reviewers Josh Burke FRSA and Lauren Gifford, as well as the whole team at the Institute, especially Wil Burns, for making this happen. And, of course, Raphaël Cario for being my academic partner in crime.

👀 Check out the full open access paper here: https://lnkd.in/emN_4UEg

👂 Curious for your thoughts and feedback. We put a LOT of effort into this one.

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