31 July 2024
With the UK government consulting on the mechanics of introducing carbon dioxide removal (CDR) into the UK ETS, Luca Taschini and Josh Burke from LSE Grantham Research Institute explore how the system can best accommodate the expected influx of CDR. They conclude that in the long term, as the cap declines, switching from a gross cap to a new net cap may prove to be a more efficient option, especially as this would lead to net-negative emissions over the longer term. By adopting a new net cap, the system can accommodate the expected influx of CDR while achieving the desired level of gross/net reductions and maintaining revenues, they argue.