arbiter
JournalsAccount

The Economics of Carbon Dioxide Removal

Ottmar Edenhofer et al.

Annual Review of Resource Economics2025https://doi.org/10.1146/annurev-resource-010224-094505article
AJG 2ABDC B
Weight
0.48

Abstract

Carbon dioxide removal (CDR) is an emerging topic in climate policy. We review the nascent economic literature on the governance of CDR and discuss policy design and institutions. We first assess the role of CDR in climate policy portfolios that include abatement and adaptation. Cost-saving technological progress could make CDR a game changer in climate policy: CDR creates new sectoral, intertemporal, and international flexibilities, which reduce overall costs and allow a return to a temperature target after temporary overshooting. Moreover, CDR can reduce the problem of international cooperation due to substantially lower supply-side leakage via fossil fuel markets. A key challenge lies in its governance and incentive structure, which are complicated by the nonpermanence of carbon storage and default risks of the firms committed to future CDR. For CDR governance, we survey approaches that incentivize removals by price instruments or include CDR in (modified) emissions trading schemes.

5 citations

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1146/annurev-resource-010224-094505

Or copy a formatted citation

@article{ottmar2025,
  title        = {{The Economics of Carbon Dioxide Removal}},
  author       = {Ottmar Edenhofer et al.},
  journal      = {Annual Review of Resource Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1146/annurev-resource-010224-094505},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

The Economics of Carbon Dioxide Removal

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.48

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.41 × 0.4 = 0.16
M · momentum0.63 × 0.15 = 0.09
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.