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What is permanence worth?

Photo by Caleb Jones on Unsplash

We have the necessary technology to capture CO2 from the air - that is not in question. There is some legitimate concern, though, about whether we can keep it sequestered over the long term.

Forestry, for example, is a very inexpensive method of capturing carbon, especially since there are so many promising areas to re-forest. But trees grow for a limited period of time, and they have a nasty habit of being illegally logged, or dying of disease, or burning a fire. Any of these events can lead to a "reversal", where the CO2 we once captured is subsequently lost. No-till agriculture has a similar reversal problem - someone could buy the land later, and till it. Even CO2 injected into wells can leak if the wells are poorly constructed, or poorly maintained.

Ideally, we'd like to sequester the carbon once and be done with it. But our human timescale of "be done with it" doesn't sync up well with the geological timespans of planetary systems. Policymakers argue with each other over whether the impact of greenhouse gases is best considered over a 20 year time horizon, or a 100 year horizon, while geologists glumly point out there will still be 2% of today's CO2 emissions left in the atmosphere in 200,000 years. If we really want to be one-and-done, we have to take a much longer perspective.

This issue is the crux of a recent paper called "The cost of permanent carbon dioxide removal", which makes the case that on a cost basis, durability is really the only parameter that matters when deciding how to invest in carbon capture. Every forest has a 50% chance of burning down every 100 years, so we imagine the true long-term cost of emissions, the few decades of abatement we get from trees is just the blink of an eye. Biochar leaks its carbon back to the air over just a hundred years. If we imagine we are trying to keep the atmosphere pure for 1,000 years or more, the true cost of capture by these methods is over 10X what we imagine it to be today.

The paper's approach is classic academic analysis in the sense that it is mathematically correct if you accept its initial assumptions that "permanence" means 1,000 or 2,000 years, or more. But from the standpoint of human behavior, this base assumption is somewhat non-sensical. No real policymaker plans over such long time horizons, and it's not terribly helpful to (somewhat arbitrarily) to pretend we will consider this choice.

The model might be more interesting if it attempted to assign a 'discount factor' for emissions instead. A discount factor is a standard financial tool that measures how much you'd ask to be paid in order to keep your money off limits for a year. If your discount rate is 5%, then if. you kept $100 hived off in an account for a year, you'd like to get back $105 at the end.

There is surely a discount rate for carbon emissions - it should be worth something to us to abate emissions today, even if we knew they would leak tomorrow, if only because we will be richer and more capable tomorrow and better able to staunch the leak.

What should the discount rate be? Well, if set a discount rate at 7%, that implies we'd be just as happy to pay $200/ton for capture today as $100/ton for capture in 10 years. It also would mean that capturing the carbon in 100 years is more or less valueless to us. This is probably a much better place to start the conversation than any assumption that carries on for millennia.

Is 7% really the right number? The phrase "climate crisis" implies that we especially value the now, and thereby that our discount rate is particularly high. The number is probably higher than discount rates we'd run for other financial analysis. 7% is arbitrary, and there is no simple solution that everyone in the world would rally around. But this isn't an awful place to start, and such an assumption easily highlights the fundamental issues that academic analyses miss.

Permanence should matter in analyses of how we invest our CO2 reduction budget. But there is a case to be made that the greater the problem today, the more we should focus on standing up whatever solutions we can, as cheap as we can, and deal with the consequences tomorrow.

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