Asset owners should not over-emphasise negative emissions when supporting 1.5°C pathways, but the importance of carbon dioxide removal (CDR) in addressing unabated emissions “must not be underestimated”, according to a position paper from the UN-convened Net-Zero Asset Owner Alliance (NZAOA).
Co-authored by John Scott, head of sustainability risk, Zurich Insurance Group, the paper refers to the special report on global warming of 1.5°C from the Intergovernmental Panel on Climate Change (IPCC) as illustrating that “without CDR playing a role, it will be very difficult to meet the 1.5°C goal of the Paris Agreement”.
The NZAOA, which was launched two years ago this week, said it viewed abatement as the top mitigation priority for the next five to 10 years, but also warned that “under-investment and failure to develop nascent CDR pathways now risks them not being available as an important resource when needed at scale”.
In the paper, the group said it supported CDR approaches in two main categories, nature-based solutions and technological solutions capturing CO2 emissions from the atmosphere or from biogenic industrial processes such as fermentation.
According to the paper, the Alliance considers that there shouldn’t be sole reliance on technical CDR solutions as these were still to be developed at the scale required to create efficiencies and reduce the cost to remove enough carbon dioxide, but that “the future development of these technologies needs to be keenly pursued”.
The paper states that a range of CDR approaches will be required to remove carbon dioxide at large scale, as each potential approach would have scale limitations, constraints and trade-offs.
“The costs and benefits of each potential CO2 removal approach, and their different institutional and economic contexts and geographies, will need to be scrutinised by investors,” the authors wrote.
Referring to the NZAOA’s target-setting protocol, the position paper states that measuring and reporting generated emissions and emissions removals would enable asset owners to track progress against their net-zero goals “and ensure accountability such that the deployment of CDR does not deter or detract from decarbonisation efforts and/or ambition on a wider scale”.
The position paper also addresses carbon credits, which the Alliance views as complementary instruments to abatement strategies.
In an announcement about the position paper, the NZAOA said the timeline for implementation of CDR technologies would have a significant impact on the likelihood of achieving net zero emissions by 2050 and on “the ability to course correct in the event of those targets being missed”.
“Investment now, combined with strong policy support for the tightening of a complementary carbon credit market, will drive progress towards our shared goal of an accelerated green transition,” it said.
Günther Thallinger, member of the board of management at Allianz SE, one of the NZAOA’s 48 members, said the Alliance believed an “incentives + mandate” approach must be applied to the development of CDR technologies and deployment of nature-based solutions.
The full position paper can be downloaded here.