New analysis suggests carbon markets must account for storage duration in pricing removals

Carbon dioxide removal technologies are becoming increasingly important for climate action, but their differing storage times matter for policy design. A new study published in Environmental and Resource Economics by the Potsdam Institute for Climate Impact Research (PIK) provides guidance based on economic principles. While non-permanent carbon storage plays a valuable role as economies transition away from fossil fuels, its contribution is less valuable than permanent storage; this should be reflected in carbon pricing schemes that aim to incentivize the ramping-up of removals.