The significance of carbon removal policy

Dominique Barker: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape with a view on addressing current issues in a concise format to help you navigate and take action. I’m your host, Dominique Barker. Please join me as we explore today’s most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters.

Eli Mitchell-Larson: NDCs are Nationally Determined Contributions, which is UN speak for what each country says it’s down for, let’s say.

Dominique Barker: Today we welcome Eli Mitchell-Larson, who’s Launch Director at Carbon Gap and Researcher at Oxford Net Zero. Eli’s work is focused on building a negative carbon future through finding ways to permanently and safely lock up carbon dioxide. And he does so by advising on policy aspects. On today’s episode, we’re going to be discussing the current state of policy with regards to carbon removal, which includes natural strategies like tree restoration and agricultural soil management, or engineered solutions such as direct air capture. And that’s where, by the way, I met Eli. Please feel free to see the replay of the Climeworks’ Direct Air Capture Summit, where some of these topics were discussed. I was very pleased to finally meet Eli. He comes with a deep pedigree in this area and is seen as a global expert. So thank you for joining today’s episode.

Eli Mitchell-Larson: Thanks, Dominique. Great to see you again.

Dominique Barker: So recently we were both on a panel at the Climeworks’ Direct Air Capture Summit where a common discussion topic was policy. With your background, we would love to hear your insights into why policy is important for upcoming carbon removal methods.

Eli Mitchell-Larson: Sure. Absolutely. Well, I think sometimes we kind of divide up the world into the private sector and voluntary commitments and policy and what governments are doing. And I think what I like to keep reminding myself is it’s all so deeply interrelated. Right? The price that we pay for our food is a result of what kinds of agricultural subsidies our government has put in place. The rate with which an energy technology gets cheaper is usually directly a result of how much public funds the government puts into deployment incentives like how the US had an investment tax credit or the Germans had a feed in tariff. So the market plays the most pivotal role in driving these new solutions forward. And I think CIBC and other organizations that take a kind of leading role help push things, but ultimately policy sets the rules of the game, it sets the basis within which everyone can compete. And so I think for too long we’ve had policies that vastly advantaged fossil carbon sources of energy, which is ridiculous, and we’ve under resourced on changing policies to incentivize a transition. But I think we’ve started to get that right with renewables. And I think one thing that you and I talked a lot about on that panel at DAC summit was this idea of deployment incentives and how one of the most powerful things the government can do is put in place a policy that provides a guaranteed price for carbon removal, just like we did for clean energy. And I think with something like that, we can really move forward much, much faster. On the ag side, you know, policy affects almost every aspect of land management, and that’s not just at a national level, that’s also at a local level and how zoning works and sort of what decisions local communities want to make about how they manage their land. And I think that’s something that we haven’t talked enough about in the carbon removal community is, you know, carbon removal is anything that takes CO2 out of the air and stores it. And that includes everything we do with the land, every tree we grow, every farm that we harvest from. We really need to think about that from a kind of a local perspective. What do people want? What can we do within what local communities are willing to accept and help guide that transition to land management that actually is absorbing much more carbon than it’s emitting?

Dominique Barker: Okay, great. And no pun intended, I’m looking at my question. What is the current landscape since we’re talking about land? What’s the current landscape surrounding policy and carbon removal? And is there any action in the US and in the EU? And given I’m calling you from Canada today, I know you’re based in the UK, maybe you can give any commentary on anything you’ve seen out of Canada.

Eli Mitchell-Larson: Yes. Wonderful. So just to take a step back, you know, Carbon Gap, we’re focused really exclusively on advancing policy in Europe. Now the thing is almost everything we do is going to touch on other regions as well. So when we think about, for example, certification, how do you approve carbon removal, that’s a conversation that has to include folks and governments and stakeholders and people in countries outside of Europe, because that’s where a lot of the projects will be deployed. But I just say that to the effect that my knowledge is mostly on European policy developments. I think in the US what’s really exciting is I think the almost $3.5 billion that’s going towards CO2 to transport and storage infrastructure that the US Department of Energy is administering, that’s a huge step forward because it will hopefully provide that open source network to put to store CO2, which is needed by lots of industries, including carbon removal. In Europe, there’s a lot of really exciting movement. So in the UK there has been £100 million that was dedicated to accelerating carbon removal, first through a series of kind of demonstration projects and funding to kind of some of the earlier stage carbon removal methods as well as a significant chunk to critical research on measurement, reporting and verification, MRV. The UK is also in the process of considering and consulting about how they should put in place one of these deployment incentives. So an actual payment to anybody who removes carbon and stores it really securely. Lots of other really exciting efforts. The Swedish government has put in place a reverse auction mechanism for what they call Bio CCS, which is a really interesting term because it encompasses any activity that involves biogenic CO2, CO2 that came from plants. And that’s not just BECS, right? It’s not just plants that burn biomass for energy, which generate a lot of controversy and have their proponents and their detractors. It’s all kinds of other things like wastewater treatment or producing various food products. I mean, if there’s a stream of CO2 and it originally came from a plant and you can capture that and store it, congratulations, you’ve just removed carbon from the atmosphere. And so I think Sweden’s taken a really clever approach, especially because, and I think what’s nice about that is it reminds us that every country can find their place to advance carbon removal. Sweden has enormous working forests, so of course they should leverage that biomass footprint. At the EU level, so Brussels, European Commission, the most exciting development at the moment on carbon removal is something called the Carbon Removal Certification Mechanism, which is basically an effort to put in place a system to certify when carbon removal is good and when it’s not good. So an EU approved stamp that can tell a buyer or a government or some stakeholder that, yes, this particular instance of carbon removal is certified. That’s something that the private sector has done for years, and I think we’ll talk about that later in the conversation. But it’s really exciting to us that they’re taking that approach of trying to put that in place first. And there’s all kinds of other interesting activity in Switzerland and all around Europe. I think you asked about Canada.

Dominique Barker: Yeah, in Canada when we think about the whole growth of the solar industry, we did copy what happened in Europe with a feed in tariff in Ontario, for example. Are you seeing anything in carbon removal?

Eli Mitchell-Larson: I’m not super up on the developments in Canada except that I do know that for a long time now we’ve seen that there’s great value in having an independent advocate in really any country for the concept of carbon removal. So a lot of these topics, there’s always a risk that they can be hijacked by organizations and industries that don’t have the interests of the planet in mind. And so when instead you can form an advocacy organization that is only funded by philanthropic climate foundations, that has as its sole mission, looking at the science and saying, okay, we’ve got to reduce emissions and we’ve got to scale up removals, and we need to make sure that that is known, understood and translated into policy action. That happened in the US. There’s an organization called Carbon 180 and there’s a few other orgs similar who have done some really amazing work there. Carbon Gap, we like to think of ourselves as Carbon 180’s little sister, kind of a similar organization obviously with a very different approach because we’re working in a totally different political environment and I think we’re aware, both you and I are involved to different degrees, you more than I, but there are some similar efforts afoot in Canada that are really exciting. And so I think we probably can’t share too much about it other than to say, get in touch with Dominique. If you are in Canada or you are Canadian and you are excited about the opportunity to support carbon removal and you want to see the Canadian government both at the national and provincial level, do more. There are some like-minded people that you could join with and really make a difference.

Dominique Barker: Great. Thank you very much. So, Eli, you’re also a researcher at Oxford Net Zero, which supports the Carbon Takeback organization. Could you speak to this organization and its idea of linking Nationally Determined Contributions or NDCs? This is a term we see in the carbon markets to policy action. And of course just many of our listeners may not know what NDCs are. So upfront, if you could just define what that is.

Eli Mitchell-Larson: NDCs are Nationally Determined Contributions, which is UN speak for what each country says it’s down for, let’s say. So under the Paris Agreement, all the countries that are party to the Paris Agreement every five years they have to put forward their NDC, which basically says, here’s my plan, or rather here’s my target for how much I’ll change my net emissions. And the idea is that there can be a sort of ratcheting of ambitions where once everybody’s put in their NDC, we do the math, and lo and behold, it’s not enough. We need a lot more. And that actually is the case. Well, that puts pressure on everybody in their next NDC in the next five year period to put forward an even more ambitious target. The question that we have and something that we really want to start elevating for COP27 in the conversation is, these NDCs are not all the same. So there’s a lot of flexibility in how different countries define what their plan is in terms of their net emissions. And it’s mostly about emission reductions, as well it should be. Because there’s just so many low hanging fruit in every economy when it comes to energy efficiency and renewables. But what we’re interested in exploring, and I don’t think we have a strong, well, I think it’s a conversation that needs having, which is should countries in their NDCs make a differentiation between how much emissions they plan to reduce and how much removals they plan to scale up? Because just like every country has different emission reduction opportunities, they also have different opportunities for carbon removal based on their geography and the degree of land cover, whether they have offshore CO2 storage capability, all these different things. So it would be really powerful if countries could start demonstrating that they have appropriate ambition to reduce emissions in line with net zero and they’re showing what contribution are they going to make to scaling up removals. So sorry, that’s a bit of a deep dive on the NDC point. The other part of your question, so yeah, Oxford Net Zero is an interdisciplinary research program at Oxford that covers all kinds of things, including the public acceptability of some of these approaches, how to engage with the voluntary carbon market, what role nature plays in delivering net zero. So it’s a really wide ranging research program and some folks within Oxford Net Zero have been champions and developers of an idea called Carbon Takeback. And the concept is really simple. It basically says if you’re going to take carbon out of the ground, you’ve got to put carbon back into the ground. And I think there’s some folks in that group, I mean, namely the visionary and the architect behind it, Myles Allen, who would be an excellent guest, I would say, for this podcast, as well as Marguerite Kuiper in the Netherlands. But I think the piece from that thinking that I’d like to talk about now in the context of removals is the fact that we do have to start thinking of our carbon as which kind of sphere does it belong to. So some of the carbon is in the geosphere, it’s in the solid earth, it’s been there for eons and it stays there most of the time until we dig it up as a fossil fuel. And a lot of the carbon is in the biosphere, it’s in the living organisms and soils and forests that cover the earth. And I think one of the most important principles that we’ve been advocating for is to make sure that we really recognize how different these two locations and these different carbon cycles are. And we put this in a World Economic Forum brief on carbon removal, and there’s also a paper in nature climate change that maybe we can link to in the show notes that I was involved in. And the idea is this, if you take carbon out of the geosphere, so if you take it out of a really safe place where it’s being stored for a long time, it really is most legitimate or really a durable net zero state is one in which you’re putting carbon back into that same reservoir, and that could be a similar reservoir, mineralized into a solid form. And likewise, if you’re depleting carbon in the biosphere, if you’re clearing land or in any way causing a loss in carbon to the biosphere, you need to put more carbon back where it came from, back into the biosphere. And of course what we’re doing now mostly is kind of mixing the two reservoirs. So we’re taking carbon out of the geosphere, burning fossil fuels and we’re in many cases planting a lot of trees or using nature based solutions to counteract those fossil fuel emissions. Deploying those nature based solutions is critical, and we’re thrilled that’s happening and that needs to be happening 10x, but that sneaky little thing that’s happening where we’re basically converting geological carbon into biological carbon, that’s where we start to get into trouble. And that’s where we advocate for making sure that we look at these two carbon stocks distinctly and we’re at least labelling the carbon based on where it comes from.

Dominique Barker: Yeah, one way that I like to describe that as reverse mining. So as you take the carbon out of the ground, put it back in the ground. At the DAC summit, you mentioned that the majority of action towards standardizing carbon markets has really been driven by the private sector. If governments were to step in to create policy, how would you expect the private sector to react and what would be their new role?

Eli Mitchell-Larson: Fascinating question. Yes. So, you know, for decades people have been participating in the voluntary carbon market. Basically, companies are using their kind of corporate social responsibility budget or some money that they have that they’re willing to commit to climate, to buying carbon credits, and then using those carbon credits to make a claim, namely that they’ve neutralized some of their emissions. And that’s the act of offsetting. And, you know, I always go back to George Monbiot’s 2006 article, where he compared offsetting to indulgences, Catholic indulgences, and just the kind of problems with that line of thinking. And I think some of the critiques that he’s raised have really never been resolved. And on top of that, we’ve seen that for many years, a lot of the carbon credits that are being traded on the voluntary carbon market just don’t do what they say they do on the tin. They just don’t have a real effect on the atmosphere. And there’s been scientific analyses and investigative journalists exposing bad carbon projects, and it’s been a real mess. And so the private sector has done its best, but ultimately a voluntary market is one in which you volunteer to participate. So it’s really hard to not get these kind of misaligned incentives where a lot of people want to do the right thing, but there’s a constant temptation to buy that cheaper carbon credit and to kind of go lower on that quality spectrum. And to be fair, there hasn’t been that crystal clarity about which carbon credits are higher quality than others because it’s a spectrum. And by the way, quality for carbon credits is many different things. It’s additionality, it’s durability. It’s the other co benefits that are provided. So to your question, as we shift increasingly to a world in which, yeah, governments set the rules, which is really what they should be doing, because I think so often about how we as purchasers of products and services, we rely on governments to make sure that when we buy unleaded fuel at the pump, it is what it says it is. Otherwise we’re going to destroy our car engine. And when we buy food, if it says it’s free from BPA or it’s organic certified, we expect that to be the case. So governments play a massive role in regulating what claims are made. And if a company is claiming that their product is net zero, that claim must be on the basis of really rigorous, high quality carbon credits that have been vetted and approved from a government certification process. So that’s the future. So to your question, what’s the role of the private sector in this new regime? Huge role. So many of the methodologies that they developed, a lot of them are still really good. So if we can use those off the shelf, amazing. And also anybody that’s providing ancillary services and I know that you’re really involved at CIBC in a company that does something like that, aggregates demand and runs kind of a two sided marketplace for carbon credits. Anyone like that who’s providing those services, they’ll still be providing those services. They’ll just be doing so in a market that has governance and government involvement on some level. So I think there’s a place for all of these players. And the other thing I would say is that whereas right now, if you’re an airline, let’s say, and you want to be more rigorous than your competitors when it comes to your climate plan, you’re going to pay more and look for higher quality carbon credits, but you sort of do so to your own detriment. In other words, all your competitors don’t have to spend as much money. So this is a good thing for everybody because government involvement on certification, it’s going to create transparency for consumers who are buying this stuff and it’s going to force entire sectors to rise to a level playing field. And those companies that did move faster, the ones that kind of went above and beyond, they still get a lot of credit for that. And they can continue to be the kind of lead within that that realm. But at least their competitors now have to do the same thing. So I think the private sector is critical in this, but we can’t understate how important it is for government to help create the framework to certify high quality versus low quality. We do it in every other sector. Of course we need to do it with carbon.

Dominique Barker: Yeah, one topic that we always talk about on this show is just that importance of voting for climate, for example, because governments need to know that the people who’ve elected them support them. So that’s number one job is to vote. And then of course, implementing some of these regulations that you mentioned. You mentioned a fairly straightforward policy idea that I found that I’d love for you to go into a little bit more. And that was about governments providing a backstop to eliminate financial loss in carbon removal projects. Do you want to explain that?

Eli Mitchell-Larson: Yes, sure. I think you and I discussed this. And as I recall, what we were talking about is something like a first loss reserve. So this idea that in order to build the facilities to remove carbon at the scale that we’re going to need to. And for this, I’m thinking mostly about actual industrial scale carbon removal, not so much forestation or soil carbon, which I think there are other excellent policy options to incentivize that kind of carbon removal. When it comes to building large assets, you know, organizations like yourself are going to have to put in that project finance, they’re going to have to put in that money to finance the project and get it built. And they’re only going to do that if there is an off taker for the carbon credits. So if the person who’s removing the carbon with a direct air capture facility, let’s say, and storing that carbon geologically they’re generating carbon credits. They need to show that they’ve got someone to buy those credits. And I think it’s difficult for investors to make that first move and to be the first bank to finance one of these things. I think you’ve worked extensively in the Solar and Wind Project Finance world. I think you were saying just how in the early days in that world it was so hard to get somebody to finance a solar project and now it’s considered incredibly low risk.

Dominique Barker: Yeah, even the technology, for example, I remember it was, you know, what is the life of a solar panel and understanding that at the time technology risk, which, you know, 20 years later, the risk is barely minimal.

Eli Mitchell-Larson: Absolutely. It’s funny to look back at our apprehension about something that is now considered just so straightforward. And I think this is what governments do when the private sector is unable to take those risks. Because, let’s be honest, there are some execution risks. Let’s take the example of biochar. Someone’s doing biochar at a large scale. They’re paralyzing biomass, turning it into a high density kind of resistant charcoal, and maybe generating some energy in the process. You know, they’re going to have to manage their source of biomass. They’re going to have to manage, you know, tweaks to the combustion process and, you know, things might go wrong. So, yes, there is some execution risk. And to get a sector going, if the government can be the one that takes a portion of that loss. So a first loss reserve would look like, you know, the government guaranteeing many, many loans, only a few of which are going to go bad, right? And by go bad, I mean, you know, perform less well than we thought they would. So if the government’s taking that first loss and the risk is really spread, that’s actually an incredibly efficient way for public money to be used to galvanize massive investment. And I think that will help eliminate those execution risks, make these carbon removal methods more robust and bring their risk down. And pretty soon, investors and financiers can really put this money in without that instrument, just like happened with solar and wind. And I think there’s some great examples in the US and Canada and elsewhere of that being successful in the past.

Dominique Barker: Lastly, alongside the private sector, what is the role of public engagement in developing substantive policy? Can you comment?

Eli Mitchell-Larson: Such a great point. I think it’s so different in every country. I think, you know, you mentioned voting, but I think what people forget is that, you know, actually it’s possible for really anybody to participate in the policymaking process. And one partner that Carbon Gap has worked really closely with for almost a year now is a group called the Open Air Collective, which is a kind of grassroots mobiliser of people interested in carbon removal. And the reality is it’s not impossible to develop a policy concept, socialize it with a group of companies, policymakers, etc., and actually get something onto the agenda. I think we think of this as something that happens in the halls of in Ottawa or in Brussels or wherever. But, you know, there’s a big role. And I think, you know, ultimately we have to ask for what we want. And we also have to kind of help galvanize these markets. And I think the other thing is policymakers and carbon removal developers need to engage with the public. Unlike power plants, most carbon removal methods are a good thing. They actually are increasing or improving air quality or making a place healthier, bringing economic benefit, but nevertheless, any sort of large infrastructure, any sort of large change to how we manage our land or to how we remove carbon from the air, it’s going to require the buy in, the support and the vision of the people who are going to live around where that happens. And that’s a lesson that I think as a species we keep failing to learn after many, many decades. So this time it’s got to be different. And I think we’ve really got to engage everybody and not just on deploying the projects, but also on what policies they’re going to accept, because ultimately it’s their money. The government represents the people and the money that it disperses is the money of the people. So it needs to be efficiently and fairly allocated to these climate technologies.

Dominique Barker: So before we finish off completely, I understand you’ve got a call to action for us. What are you looking for at Carbon Gap?

Eli Mitchell-Larson: Yes, thank you, Dominique. I mean, I think the general call to action is we want more people to get involved in carbon removal. Right? Not at the expense of emission reduction. But if you’re in a position where you want to learn more about this topic, you want to help drive it forward. That’s really exciting. And there’s lots of places you can go. There’s communities like the Open Air Collective, Air Miners, Tomorrow’s Air. These are all kind of public communities to get engaged, I’ll make a kind of specific ask for Carbon Gap, which is we are hiring, we’re growing. And so again, our focus is exclusively in Europe, but definitely it’s possible to work remotely. So basically, wherever you are, if you’re interested in advancing carbon removal policy in Europe, if you like our philosophy, which is do what’s right for the planet, cover all the carbon removal methods, not just picking your favourite solutions, finding room for all of them and actually making a change. I mean, we have the ears and the opportunity to influence policymakers around Europe. So if you’re interested in policy, if you understand or would like to understand more about carbon management and carbon removal, give us a shout. So our website is carbongap.org. We’ve got some positions that we’re advertising currently and even if you don’t necessarily fit into those specific positions, if this is something you’re really interested in, I think we have a link there where you can reach out and just share a little bit about yourself. So come join us and if not us, join someone else. Come, come and join the carbon removal mission.

Dominique Barker: Fantastic. And obviously education being a key element and that’s the point of this podcast. So Eli, thank you so much for educating and for taking the time to join our show today. And thank you to our listeners for tuning in. We will be including the links to the reports that you mentioned in the show notes. So watch out for those. Eli, thank you so much.

Eli Mitchell-Larson: Thank you, Dominique. Thanks for having me.

Dominique Barker: Please join us next time as we tackle some of sustainability’s biggest questions, providing different perspectives to help you move forward. I’m your host, Dominique Barker, and this is The Sustainability Agenda.

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