News & Articles

The faster emissions are reduced, the more carbon will be removed

How much carbon will we need to remove from the atmosphere? The answer is often determined by looking at how much emissions are expected to remain.

The future of carbon removal

Robert Höglund

Jan 26, 2023

2 min read

Updated 3 months ago

Seeing that the world still emits 12 billion tonnes of CO₂e by 2050 in the IEA Announced Pledges Scenario, one may draw the conclusion that the slower emissions reductions are, the more carbon will be removed. But counterintuitively, the opposite is true.

What determines how much carbon is removed is the cost-effectiveness of using it. Since the vast majority of emission reductions are cheaper than carbon dioxide removal (CDR), these should be pursued first. Just because some emission reduction measures were not taken, it does not mean carbon removal is the better option. If emissions are reduced slowly, it means there still are a lot of cost-effective reduction opportunities left to pursue. The faster emissions are reduced, the sooner carbon removal becomes the cheapest mitigation option. Crucially, CDR is part of the mitigation toolbox but is often discussed as if it was outside it. This point has been emphasized by climate scientist Glen Peters severaltimes.

What primarily will determine how much carbon is removed is its cost. Demand for durable and socially and environmentally sustainable CDR at <50 USD/t would likely be in the order of tens of billions of tonnes per year. While at 150 USD/t, the demand might only be a couple of billion tonnes.

Stylized graph showing how a high emission scenario leads to low removals and vice versa

An important detail is that when making funding decisions today, we should look at the overall lifetime cost of a carbon removal method rather than just the cost of the initial deployments. If we project that direct air capture will be needed at a gigaton scale, and the price will drop quickly as it is deployed, then the price for the first few million tonnes removed is almost insignificant for the overall cost-effectiveness of the method.

The above analysis assumes that the most cost-effective will be deployed first. However, there is a big difference between what a global central planner would do and a real-world scenario where different actors make decisions based on their limited information and capabilities. In practice, more carbon will be removed than what is optimal in theory.

For example, a car-free individual living in an apartment might not have many investment opportunities to reduce their emissions, in which case carbon removal could be the best option. The same goes for many companies with most emissions in Scope 3. It can also apply to countries. In some cases, national policies to reduce emissions may be ineffective or very expensive per tonne CO₂ avoided, and carbon removal may be the more efficient choice even if other actors in the world have cheaper mitigation options. In practice, it might be difficult to finance emission reductions elsewhere, and there have been grave issues with the additionality of such efforts in the past.

As demonstrated, the need for carbon removal to reach net zero is determined by the cost of different mitigation options. But CDR might be needed not only to reach net zero but also to bring temperatures back down. However, this will be a big undertaking. To reduce temperatures by 0.1C, about 222 billion tonnes of CO₂ would need to be removed from the atmosphere, costing trillions of dollars in even the most optimistic cost scenario. If that will be done is up to future generations to decide. What we need to focus on is reaching net zero as fast as possible, making the best possible use of all the methods in the mitigation toolbox.

About the author(s)

robert picture
Robert Höglund

CTF Fund Manager

Robert Höglund is a carbon dioxide removal (CDR) and climate policy expert. In addition to managing the Climate Transformation Fund, he co-founded the CDR market overview, works with the NGO Carbon Gap, and publishes reports and articles on carbon removal and corporate climate contributions. He is a member of the EU Expert Group on Carbon Removals, the Science-based Target initiative's (SBTi) Technical Advisory Group, and the board of the KTH-led research program Mistra sustainable consumption. Robert previously headed Oxfam Sweden's policy and communications team and founded the Climate Goal Initiative in Sweden.

Related Funds

Climate Transformation Fund

More articles

Introducing Milkywire's Updated White Paper on Internal Carbon Fees

May 21, 2024

Milkywire releases the latest edition of the white paper, Guidance on setting an internal carbon fee, providing explanations, guidance and examples for companies.

Read article
Financing Nature Restoration: Addressing the Ambition Gap with an Internal Nature Fee

May 17, 2024

Discover learnings from the climate space on the gap between companies' willingness to pay and their ability to do so, why a contribution logic is essential and helpful, and practical steps to implement it.

Beyond the EU Deforestation Regulation: The Strategic Role of the Milkywire Forest and Landscape Fund

May 07, 2024

Explore the pivotal role of Milkywire's Forest and Landscape Fund in forest restoration and deforestation prevention, amidst the EU's new regulations.

Gaia amazonas image
Expanding carbon removal horizons - Milkywire selects thirteen new cutting-edge projects.

May 01, 2024

After an extraordinarily competitive selection process, Milkywire has selected new carbon dioxide removal (CDR) suppliers for the Climate Transformation Fund.

Picture from Holocene's lab. A DAC startup selected for the CTF in 2024.
Celebrating three years of Give One achievements – unveiling the next chapter with the Nature Transformation Fund

Apr 18, 2024

Milkywire & Klarna launch the Nature Transformation Fund to boost collective action for nature and biodiversity.

amazon frontlines image
Milkywire & Gold Standard Unveils Comprehensive Guide for Effective Beyond Value Chain Mitigation

Mar 18, 2024

Milkywire, alongside Gold Standard and Murmur, released a guide for Beyond Value Chain Mitigation

Image by Gold Standard