“How do you convert a permit into CO2 removal using CDR technologies without selling them back into the compliance market – in effect negating the offset?
We will sell the permits back into the market, but only when we’re ready to use the proceeds to fund carbon removal projects equivalent to the number of permits we’re selling, or more. So, in effect, the permits going back onto the market are negated by the tons of carbon we are paying to remove.”
Once credible CDR is so cheap (now > USD 100/t, most approaches over USD 600, cf Stripe Climate) that this works (current carbon prices around USD 20), the value of additional CDR tech support is pretty low because the learning curve has already been brought down.
Am I missing something?
It seems like a good way to buy allowances which is, when the cap is fixed (also addressed in the FAQ, though not 100% convincingly) better than buying most offsets, but it seems unlikely to work in the way intended.
“How do you convert a permit into CO2 removal using CDR technologies without selling them back into the compliance market – in effect negating the offset?
We will sell the permits back into the market, but only when we’re ready to use the proceeds to fund carbon removal projects equivalent to the number of permits we’re selling, or more. So, in effect, the permits going back onto the market are negated by the tons of carbon we are paying to remove.”
Once credible CDR is so cheap (now > USD 100/t, most approaches over USD 600, cf Stripe Climate) that this works (current carbon prices around USD 20), the value of additional CDR tech support is pretty low because the learning curve has already been brought down.
Am I missing something?
It seems like a good way to buy allowances which is, when the cap is fixed (also addressed in the FAQ, though not 100% convincingly) better than buying most offsets, but it seems unlikely to work in the way intended.
Hmm okay! Thanks so much for this. So I suppose the main uncertainties for me are
whether I trust that the cap will remain fixed
whether the cap-and-trade system is more effective than the offsets I was considering
Really appreciate you helping clarify this for me!