States can be laboratories for climate policy
The Supreme Court Justice Louis Brandeis famously opined in 1932 that “a state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Given the climate emergency we collectively face, and the current political vagaries and uncertainty of policy at the federal level, perhaps states can serve the American people as “laboratories” for climate policy as well, specifically in the realm of carbon dioxide removal (CDR).
The global community’s top climate priority must be rapid and aggressive reduction of greenhouse gas (GHG) emissions and decarbonization of the global economy. However, there is growing scientific consensus that we will also need to remove gigatons of carbon dioxide annually from the atmosphere to limit warming to 1.5 to 2.0 degrees Celsius above pre-industrial levels. Cumulatively, this translates into hundreds of billions of tons of CDR this century. While the bulk of these removals would occur in the second half of the century, achieving gigaton scale CDR is a mammoth undertaking that will take decades. This emphasizes the need to mobilize quickly to deploy CDR now.
Many CDR pathways, however, especially those that deliver critical long-term sequestration of carbon, are currently in nascent stages of development, and thus very expensive, at least in a world that does not translate the true social cost of carbon into markets or policymaking. Recent studies have indicated that government CDR procurement programs may be critical to ensure large-scale market adoption of CDR, helping to incentivize early stage niche discovery and penetration, facilitate scale-up and learning, as well as drive down costs.
A bill recently introduced in the New York Legislature, the Carbon Dioxide Removal Leadership Act (CDRLA), may serve as a model for government policies that seek to facilitate large-scale deployment of durable CDR. The bill directs New York to purchase 10,000t of CDR in 2024, and increases annual removal targets by 100 percent year-on-year over the course of its five-year authorization. The bill is standards-based, requiring clear additionality, a minimum of one-hundred-year durability, as well as third-party measurement, reporting and verification (MRV). Suggested CDR approaches include terrestrial biomass-based carbon removal; enhanced rock weathering and other mineralization; ocean-based pathways; long-lived products such as concrete and other construction materials that sequester carbon dioxide; and direct air capture.
The CDRLA would facilitate state purchases through a reverse auction, a bidding process whereby qualified suppliers of CDR would submit bids for removal in exchange for state payments. The bill would authorize the state to pay a maximum average price per ton of $350 for qualified projects in 2024, with this sum decreasing by 5 percent annually. The state’s CDR purchases under the bill would be financed by the repeal of a corporate tax subsidy on fossil fuel for commercial aviation, one of the “hard-to-abate” sectors identified in the state’s landmark 2019 net-zero policy, the Climate Leadership and Community Protection Act.
The bill contains a number of provisions that seek to ensure that procured CDR meaningfully addresses the threat of climate change, while delivering the economic benefits of CDR — estimated to be a multi-trillion-dollar market opportunity in the coming decades — to New York in an equitable fashion. The bill requires a full lifecycle assessment (LCA) of all proposed CDR projects to ensure that substantially more carbon dioxide is removed from the process than is emitted through its implementation and execution. The bill also explicitly prohibits any CDR project that incorporates enhanced oil recovery (EOR) or otherwise facilitates the extraction or other production of fossil carbon. All CDR projects procured under the CDRLA must be located in New York state, to enhance the industrial development benefits of the policy. Every CDR project submitted for procurement must complete an “environmental justice and equity community engagement and assessment report,” which requires direct consultation with local communities.
A key benefit of climate policy that leverages public procurement — over, for example, a compliance mechanism — is the opportunity to incorporate non-price factors into governmental purchasing decisions. The CDRLA explicitly directs the state to create a procurement “scorecard” that factors, in addition to price, “bid preferences” for equity considerations such as benefits to “disadvantaged communities,” job creation, the employment of union labor and agricultural or ecosystem co-benefits. The scorecard also factors in techno-economic considerations such as energy and land-use efficiency, speed of delivery, durability in excess of one hundred years and scale potential of the CDR pathway.
It bears repeating that climate policy at every level of government must strongly prioritize reducing emissions. However, to reach our climate goals of limiting warming to 1.5 degrees or even 2 degrees Celsius, tens of billions of tons of CDR will be required as well. This scale of CDR will not be possible without significant public sector support, and there are a number of interesting CDR bills percolating in Congress. Passing legislation is a significant, complicated challenge at any level of government, and even more so at the federal level. It will be interesting to watch in the coming months and years as the CDRLA advances in climate-forward states like New York. This “lab work” at the state level can deliver meaningful climate impact itself as well as serve as a useful model for effective and impactful federal policy.
Wil Burns is a visiting professor in the Environmental Policy & Culture Program at Northwestern University. He previously served as the founding co-director of the Institute for Carbon Removal Law & Policy at American University, as well as previous president of the Association of Environmental Studies & Sciences.
Toby Bryce is a CDR policy lead with OpenAir, a global volunteer network dedicated to the advancement of carbon removal. He also advises early-stage climate and CDR companies on commercialization, market development and corporate strategy.