Using Renewable Portfolio Standards to Accelerate Development of Negative Emissions Technologies

Abstract

As society continues to emit greenhouse gases, the likelihood of dangerous climate change occurring increases. Indeed, most analyses project that we must utilize negative emission technologies (NETs) to avoid dangerous warming. Even the Paris Agreement anticipates the implementation of NETs. Unfortunately, NETs are not ready for large-scale deployment. In many instances, their technologies remain uncertain; in others, their ability to operate at the scale required is unknown. Other uncertainties, including their costs, effectiveness, and environmental impacts have yet to be determined.

A means to accelerate the development and implementation of NETs is a policy that already did the same for renewable energy – Renewable Portfolio Standards (RPSs). RPSs require that providers source a predetermined amount of their electricity from renewable energy. RPSs have an established track record of stimulating investment in renewable energy in the United States and elsewhere. These policies incorporate a number of requirements that jurisdictions can tailor to accommodate local resources, industries, and objectives.

Similarly, RPSs can facilitate the investment in and development of NETs. RPSs create markets for technologies that encourage compliance with low-cost alternatives. This incentivizes innovation, which lowers costs. Furthermore, jurisdictions can utilize other tools of RPSs, such as technology carve outs and credit multipliers, to encourage development of specific technologies. Using these provisions, states have incentivized the development and installation of renewable energy in general and solar power in particular.

However, current RPSs are too limited to develop NETs. States need to expand the technologies that satisfy RPS mandates to include NETs, thereby fostering the development of NETs. Over time, states should also expand the economic sectors required to comply with their RPSs to encompass the agriculture, aviation, and manufacturing industries, sectors with emissions that are expensive or difficult to mitigate.

Keywords: geoengineering, negative emissions technologies, carbon dioxide removal, renewable portfolio standards, climate change

JEL Classification: K10, K32