Hugh Helferty published this article in RealClearEnergy arguing for a Carbon Takeback Obligation (CTBO) to ensure that we can reach Net Zero by 2050. Importantly, a CTBO would ensure that it is the oil and gas producers who pay for the climate cleanup of the emissions from their products.
From the article:
How can society engage industry – especially the fossil fuel industry – in addressing this problem? The answer is clear: make them accountable for the emissions that result from their production. If they are going to continue to produce a product that adds carbon dioxide to the atmosphere, they need to ‘take back’ an equivalent amount of carbon. Such a policy, called a Carbon Takeback Obligation (CTBO), puts the challenge of addressing the problem where it belongs – on the source.
Taking back carbon isn’t cheap. Depending on the source, it can cost anywhere from $50 to $1,000 per metric ton. Fossil fuel producers will be faced with a choice: capture and store carbon dioxide, reduce coal/oil/gas production, or do both. Carbon dioxide emissions would no longer be an externality to be ignored but rather a cost of doing business.
A CTBO would have two effects. First, it would drive fossil fuel producers to develop and deploy lower cost technologies to capture and store carbon dioxide. Of course, some costs will remain and producers will attempt to pass these along to their customers. To the extent that they are successful, this will increase the cost of fossil fuels, making them less economic. Customers will strive to use less energy and to switch to no/low-carbon sources – exactly what we need them to do in order to accelerate the energy transition.
Some have argued that a carbon tax is the most efficient way to address climate change. I don’t object to a carbon tax as a useful early step in the energy transition. But a carbon tax just makes burning fossil fuels more expensive. It doesn’t ensure that we achieve Net Zero GHG Emissions. A CTBO is more effective because it does both.
Read the full article here.